Opening Bell: 11.03.14

Author:
Dealbreaker
Updated:
Jan 14, 2019
Original:
Nov 3, 2014

Investors Eagerly Await Alibaba’s Results (WSJ)
Alibaba will report quarterly earnings on Tuesday for the first time since its record $25 billion debut on the New York Stock Exchange. Scrutiny will be intense: Alibaba’s share price already has risen 45% since the initial public offering, giving it a market value of $243 billion as of Friday, bigger than Facebook Inc. ’s. Investors and analysts say they are looking for strong profit and revenue growth in the three months through September—estimates average around 45%—as well as guidance that suggests the good performance will continue, despite a multitude of challenges.

For Pot Inc., the Rush to Cash In Is Underway (NYT)
In October, 900 people flocked to a hotel in Midtown Manhattan for a $900-a-head, three-day East Coast Cannabis Business Expo, Educational Conference and Regulatory Summit, the first of its kind in New York. The event’s organizers were two veterans of the tanning salon business; the crowd ranged from venture capitalists to chocolatiers to people currently growing illegally, with a smattering of doctors and representatives of at least one nursing home conglomerate. There were vendors of supply-chain tracking software, security services and malpractice insurance, as well as a manufacturer of precision-grade scales from the diamond district. Not a single bong in the house. “This is sexy, this is drugs,” one speaker, Adam Bierman, a managing partner of MedMen, a California-based consulting company, told a crowded conference room. “This is something there’s already demand for. This is selling pot.”

Billionaire Phil Falcone’s Halloween display had UES howling (NYP)
A black hearse sits out front, with a black-clad grim reaper beheading a corpse popping out of the roof. Nearby, smoke billows from the mouth of a huge, glowing, growling gargoyle. A possessed little girl sits on a swing with a sign that says “Cemetery,” next to a crouching, howling witch with bat wings. But perhaps the most disturbing horror prop is a creepy, old, dwarfish crone with stringy gray hair and striped socks who’s holding a turgid, dead baby. Making the scene even more macabre are fake rats and dismembered baby limbs, skeltons and a sign that says, “Keep out.”

According to the Fed, the rich are getting richer (NYP)
The share of total income of the top 3 percent of Americans grew to 30.5 percent in 2013 (from 27.7 percent in 2010), according to new Federal Reserve numbers. Further, the top 3 percent saw their share of total wealth rise from 44.8 percent in 1989 to 54.4 percent in 2013, the central bank said.

Einhorn’s Greenlight Gained 2.2% in October Amid Swings (Bloomberg)
Greenlight Capital Inc., the hedge-fund firm led by billionaire David Einhorn, gained 2.2 percent in its main hedge fund in October, when peers on average posted losses amid violent market swings. The gain brings returns since the start of the year to 4.9 percent, according to an e-mail to investors obtained by Bloomberg News. The HFRX Global Hedge Fund Index, which measures asset-weighted performance of hedge funds across various strategies, fell 1.7 percent in October, resulting in a year-to-date loss of 0.5 percent.

Alabama man allegedly robs 4 Subway stores in 4 days, blames ‘Jared Diet’ (NYDN)
Zachary Rapheal Torrance, 18, was captured in a Walmart store Thursday night after a shopper recognized him from photos posted on the local police's Facebook page, authorities said. "I don't know if he was kidding or not, but he said he had tried the Jared Diet and it hadn't worked for him, so he wanted his money back," said Hueytown Police Chief Chuck Hagler, according to the news site AL.com. Jared Fogle made national headlines when he lost 245 pounds 15 years ago by eating nothing but turkey Subway sandwiches.

Greenberg May Be Called to Testify at AIG Trial (WSJ)
Through five weeks of testimony in Maurice R. “Hank” Greenberg ’s $40 billion lawsuit against the U.S. government over the bailout of American International Group Inc., one figure has been conspicuously missing from the courtroom: Mr. Greenberg himself. That is likely to change soon, as the former AIG chief is on the list of potential witnesses as the government sets out its rebuttal arguments. In a trial that has lacked fireworks, the testimony could be a lively event, with the feisty 89-year-old squaring off against government lawyers who may seek to use Mr. Greenberg’s own words against him. Known as a sometimes brusque, hard-charging boss, Mr. Greenberg built AIG into a global insurance behemoth over nearly four decades before being pushed out in 2005, and he was its largest individual shareholder when the bailout occurred. The lawsuit, filed by his investment and charitable firm Starr International Co., accuses the government of overstepping its authority in demanding a 79.9% equity stake in exchange for providing an $85 billion emergency loan. Since the trial began Sept. 29, Mr. Greenberg hasn’t set foot in the U.S. Court of Federal Claims in Washington, due to rules that don’t allow potential fact witnesses to sit in on other testimony. Reached on his cellphone last week, Mr. Greenberg said, “I’m in China. I just finished working out.”

British banker linked to gruesome Hong Kong slayings (Reuters)
A 29-year-old British banker has been arrested in Hong Kong in connection with the grisly murder of two women, a rare occurrence in a city known for its low homicide rate. Hong Kong police said in a statement on Saturday that a 29-year-old foreign man had been detained earlier that day after two women were found dead in an expensive apartment in Wan Chai, a central city district known for its night life. The man has not been charged. Police declined to give the name or the nationality of the man, whom local media and a source with knowledge of the situation have identified as being a Bank of America-Merrill Lynch banker.

FBI Opens Criminal Probe Into American Realty Capital Amid Accounting Meltdown (WSJ)
The Federal Bureau of Investigation has opened a criminal investigation into American Realty Capital Properties Inc., according to a person familiar with the matter, just days after the company revealed accounting errors that had been intentionally concealed from the public. On Wednesday, American Realty Capital announced that it had overstated its adjusted funds from operation, a measure of cash flow commonly used by real-estate investment trusts, from the first- and second-quarters of 2014. Although the amount of money involved--$23 million—was relatively small, the irregularities resulted in the resignation of the company’s chief financial officer, Brian Block, and chief accounting officer, Lisa McAlister.

Protesters mob Park Ave apartment after nanny debacle (NYP)
Elyse Slaine, ex-wife of fallen Galleon Group hedgie David Slaine, faced an angry mob of protesters in front of her posh Park Avenue apartment this week after her housekeeper said she was cheated out of wages. Marichu De Sesto told the crowd that Slaine — who has been described as one of Wall Street’s “most fascinating first wives” — fired her in May for requesting time off for medical appointments. After nearly 15 years of working as her housekeeper and nanny, Slaine told De Sesto to pack her bags and “be gone by the time she came back from the Hamptons,” De Sesto said at the Wednesday gathering outside Slaine’s apartment building on the corner of Park and 80th Street.

UBS Curbs Employees’ Personal Foreign-Exchange Trades (WSJ)
UBS’s tightened rules permit currency traders to carry out personal-account trades only when they are approved by managers and compliance staff, according to the person familiar with the matter. The trades must also be executed by preapproved brokers. UBS also relatively recently banned the use of mobile phones from its trading floors, this person said.

Mustache Hall of Fame accepting nominations (UPI)
The American Mustache Institute announced the first inductees into the International Mustache Hall of Fame will be announced on Burt Reynolds' birthday. The institute and sponsor Wahl Trimmers announced nominations are now being accepted for the International Mustache Hall of Fame and the first inductees will be announced Feb. 11, the birthday of actor Burt Reynolds, "one of the greatest mustached Americans in history." "The global facial hair and attractiveness communities have been pining for a proper place to honor those who have brought great mustaches to our world," said Adam Paul Causgrove, chief executive of the American Mustache Institute. "We've been working with noted halls of fame honoring everything from baseball to hot dogs to ensure we provide an appropriate experience."

Opening Bell

Pimco tops Gross; PF Changs tainted by alleged insider trading; Deutsche says Fed might sit tight 'til 2017; Guy robs banks dressed as Rick James; "Oklahoma man discovers he was shot twice after celebrating birthday"; and more.

Opening Bell

UBS Says Cleaning Up Its Act After Libor 'Shocker' (Reuters) UBS has yet to fully purge itself of a global interest rate scandal that has cost the Swiss bank its reputation and put it at risk of a wave of costly civil suits, its investment banking chief said on Wednesday. The once-venerable institution was fined a record $1.5 billion last month for manipulating Libor interest rates, the latest in a string of scandals including a $2.3 billion rogue trading loss and a damaging tax avoidance row with the United States. "We are very focused on recovering the honor and standing the organisation had in the past," Andrea Orcel told Britain's Parliamentary Commission on Banking Standards, set up in the aftermath of the Libor scandal. "I am convinced that we have made a lot of progress. I am also convinced that we still need to do more." [...] Committee member Justin Welby, the incoming Archbishop of Canterbury, asked Orcel if he was the right man to turn UBS around. "I feel I have a high level of integrity," the banker said. Orcel said that UBS was working at simplifying the investment banking business to make it less risky and prone to scandal. The committee, a cross-party panel of lawmakers headed by Conservative MP Andrew Tyrie, is switching its focus to standards and culture after spending most of the past three months assessing structural reform. Tyrie on Wednesday described the Libor rigging as "a shocker of enormous proportions". Button-Down Central Bank Bets It All (WSJ) Switzerland, for decades a paragon of safety in finance, is engaged in a high-risk strategy to protect its export-driven economy, literally betting the bank in a fight to contain the prices of Swiss products sold abroad. The nation's central bank is printing and selling as many Swiss francs as needed to keep its currency from climbing against the euro, wagering an amount approaching Switzerland's total national output, and, in the process, turning from button-down conservative to the globe's biggest risk-taker. JPMorgan Overhaul Widens (WSJ) The shift of Mr. Maclin and the departure of Mr. Staley, who once was seen as a top candidate to succeed James Dimon as chief executive, are the latest steps in a drastic reshaping of J.P. Morgan's executive suite. Many of the new leaders—a group that includes corporate and investment-bank co-heads Mike Cavanagh and Daniel Pinto, co-chief operating officer Matthew Zames and Chief Financial Officer Marianne Lake—are in their 40s. Mr. Cavanagh and Mr. Zames, who were asked last May to unwind a series of botched bets placed by a trader in the bank's Chief Investment Office known as the "London whale," are viewed as front runners for the top job, said people close to the bank. Ackman Braces for Legal Battle Over Herbalife (FBN) If filed, the lawsuit could involve alleged “tortuous interference,” implying Ackman intentionally damaged Herbalife’s business relationships, people close to Ackman said. On Tuesday, a large Herbalife distributor said he was leaving the company and called on other distributors to join him amid the controversy. In a sign of the importance of its distribution channels, Herbalife says in regulatory filings its relationship with and ability to influence distributors are items that can “materially” affect its financial condition. As of late Tuesday, people with knowledge of the matter said no decision on timing or even if a lawsuit will actually be filed had been made. The company has told FOX Business it is weighing legal action against Ackman. Ackman declined to comment on the matter. Herbalife has hired famed attorney David Boies to launch possible litigation against Ackman as well as the investment bank Moelis & Co., as its financial adviser. Goldman Will Report Fund Values Each Day (WSJ) In a reversal of industry practice, Goldman Sachs Group will begin disclosing the values of its money-market mutual funds daily rather than monthly, according to people familiar with the company's plans. Some of the changes will take effect as early as Wednesday...According to people familiar with Goldman's thinking, the company is beefing up its disclosures to satisfy investors' calls for greater transparency on fluctuations in the price of their investments. Brazil prostitutes to learn English ahead of World Cup (AP) Prostitutes in one of Brazil's biggest cities are beginning to sign up for free English classes ahead of this year's Confederations Cup and the 2014 World Cup. The president of the Association of Prostitutes of the city of Belo Horizonte says by telephone that 20 have already signed up for the courses and she expects at least 300 of the group's 4,000 members to follow suit. The association is organizing the classes and seeking volunteer teachers. Prostitution is legal in Brazil. Belo Horizonte will host six World Cup matches and Vieira said Tuesday "it will be important for the girls will be able to use English to let their clients know what they are charging and learn about what turns them on." AIG Cites Duty to Weigh Suing U.S. as Lawmaker Criticism Mounts (Bloomberg, related) American International Group said it has a duty to weigh joining a suit by former Chief Executive Officer Maurice “Hank” Greenberg that claims the insurer’s 2008 U.S. bailout was unconstitutional. “The board of directors has fiduciary and legal obligations to the company and its shareholders to consider the demand served on us,” CEO Robert Benmosche said yesterday in a statement. The board is scheduled to meet today to hear arguments from representatives of Greenberg and the U.S. Lawmakers including Senators Elizabeth Warren and Robert Menendez and Representative Peter Welch said New York-based AIG shouldn’t join the suit. “Taxpayers are still furious that they rescued a company whose own conduct brought it down,” Welch said in a letter to AIG Chairman Steve Miller. “Don’t rub salt in the wounds with yet another reckless decision.” Vow of New Light For 'Dark' Trades (WSJ) Richard Ketchum, chief executive of the Financial Industry Regulatory Authority, said in an interview Tuesday that the regulator is expanding its oversight of the dark-trading venues, with an eye on whether orders placed in public exchanges are "trying to move prices or encourage sellers that may advance their trading in the dark market." The regulator also is boosting its surveillance of high-speed trading and is increasingly looking at rapid-fire trading across exchanges, he said. "You're going to see more [focus] in those areas in 2013," Mr. Ketchum said. Goldman, Morgan Stanley to Settle on Foreclosures (Reuters) Goldman Sachs and Morgan Stanley are among a group of banks expected to agree as soon as this week to a $1.5 billion settlement with federal regulators over botched foreclosure claims, two sources familiar with the matter said on Tuesday. The accord would come on the heels of a separate $8.5 billion settlement announced on Monday with 10 bigger mortgage servicers, including Bank of America, Citigroup, JPMorgan Chase, Wells Fargo...Goldman and Morgan Stanley's respective roles in the settlement stems from mortgage-servicing businesses that the two investment banks purchased in the run-up to the subprime mortgage crisis, and have since sold. Goldman had owned Litton Loan Servicing and Morgan Stanley owned Saxon Capital. Taco Bell responds to teen's request for a custom Speedo (LI) The week before Christmas, 15-year-old Ryan Klarner posted on Taco Bell’s Facebook page, introducing himself with a rundown of his swimming and diving achievements before making an offbeat request. “[I]s there any way you guys could make me a customized Speedo that says think outside the buns on the back of it? If you did, that would mean the world to me,” the Illinois teen asked...Klarner said he first came up with the idea a couple of years earlier and decided last month to go ahead and ask, even though he never had asked a company on Facebook for anything before. “I did not expect it to blow up as much as it has. I didn’t really expect to get the Speedo out of it, either,” he said. But last Wednesday, the social media team at Taco Bell wrote back. “What size do you wear? And what’s your address?” “He really wanted something and he went after it,” Tressie Lieberman, director of digital and social engagement, said. When we think people are really extraordinary...then we want to reward them.”