Opening Bell: 11.05.14

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Will the LeBron James Stimulus Be Good for Cleveland? (NYT)
What FitzGerald and some other Cleveland boosters envision, though, is a LeBron stimulus that enriches the city as a whole. Start, for example, with the restaurants along East Fourth Street, near the arena, whose business dropped significantly after James bolted for Miami. Scalpers are happy, too, and owners of nearby stores that sell T-shirts and jewelry also expect sales to pick up. To get that $500 million estimate, LeRoy Brooks, an emeritus professor of finance at John Carroll University, just outside Cleveland, assumed that all these people making more money will spend it in Cleveland, multiplying the James effect. Brooks told me he now thinks James will add between $163 million and $426 million to the regional economy. He said that he made the first estimate in haste, “on the day after my first grandson was born.” FitzGerald’s staff estimated a more modest bounce. The LeBron stimulus, they concluded, could reach $285 million, including the creation of about 550 new jobs.

Baltimore Banker Reveals His Double Life As A CIA Agent (CBS)
The secret and closed world of the CIA includes espionage, covert operatives, international surveillance—and Baltimore businessman Ed Hale. “I was an agent for the CIA,” Hale said. In a WJZ exclusive, Hale reveals his covert role inside the CIA. “I was the perfect cover because I was all over the world with my vessels and trucking here in America, so I was the perfect person to take somebody and send them out to Afghanistan, Uzbekistan,” Hale said. Hale probably looks familiar. He was the face of First Mariner Bank as chairman and CEO. He appeared in their commercials for years and is credited with developing the Canton Waterfront downtown. He owns the Baltimore Blast.

Republicans Secure Senate Control (Bloomberg)
Republicans roared back in the midterm elections on Tuesday, capturing control of the Senate from Democrats, holding on in crucial governor races and keeping their majority in the U.S. House. In the biggest prize of the night—control of the Senate—Republicans were pushed over the edge with Joni Ernst's victory in Iowa, giving her party their first majority in nearly a decade after picking up six seats Tuesday night...At parties around the country, Republicans were already celebrating. Senator Jerry Moran hugged lobbyists and donors at the National Republican Senatorial Committee party in Washington. In Kansas, staffers for incumbent Senator Pat Roberts broke out their beers before final results were in. And in Louisiana, supporters for Republican Senate candidate Bill Cassidy took a break from watching election returns to offer a quick prayer.

Defiant US Rep. Grimm wins 3rd term amid tax trial (HC)
Republican U.S. Rep. Michael Grimm won a third term in Congress on Tuesday despite a rocky year that included a federal indictment on tax evasion charges and being caught on camera threatening to throw a TV reporter off a balcony. Grimm defeated Democratic challenger Domenic Recchia in the hotly contested fight for New York's 11th Congressional District, which covers Staten Island and a part of Brooklyn. "The bottom line, you had my back when I needed you most, and I'll never forget it," Grimm told supporters in his victory speech...Grimm has pleaded not guilty to hiding more than $1 million in sales and wages while running a small Manhattan restaurant. His trial is set for February...In January, Grimm was seen threatening to throw a TV reporter off a balcony after the journalist asked Grimm about an FBI probe into his campaign finances. During their Oct. 28 debate, Grimm said he apologized for the incident but described himself as "tenacious."

A Recent Surge of Leveraged Loans Rattles Regulators (Dealbook)
As regulators hunt for the next financial bubble, they are homing in on an obscure corner of Wall Street: the debt market where Tom Shannon’s company, a chain of flashy bowling alleys, recently borrowed nearly half a billion dollars. Mr. Shannon’s company, Bowlmor AMF, is one of hundreds with unlovely balance sheets that have tapped this market for more than $2 trillion since the start of last year. “It has all worked out very well for us,” Mr. Shannon said, sitting in the office of one of his bowling alleys, near Times Square. “The payments are very reasonable.” In raising money for Mr. Shannon, Wall Street would appear to be doing its job of matching companies that need capital with investors who can provide it. After banks like JPMorgan Chase and Bank of America make loans to the companies, they turn around and sell the debt to hedge funds, pensions and even mom-and-pop mutual funds. These leveraged loans, as the debt is known on Wall Street, funnel money to companies that might otherwise struggle to finance their ambitions. Bank regulators, however, are worried. In recent months, the Federal Reserve and the Officer of the Comptroller of the Currency have intervened to tamp down the market. Leveraged loans are made to companies with low credit ratings that could suffer high losses in a downturn. As a result, the regulators have tried to stop the banks they regulate from arranging certain types of leveraged loan deals.

Irish Agog That Joe Kernen, CNBC Host, Missed Their Exit From U.K. (NYT)
Becky Quick: What has the weaker euro meant, in terms of tourism? Martin Shanahan: So, I think Ireland’s a very globalized economy, so we look to what is happening here as much as we do to what is happening in Europe and we look to what is happening in … Joe Kernen: You have pounds anyway, don’t you still? Shanahan: We have euros. Kernen: You have euros in Ireland? Shanahan: We have euros, yes, which has aided … Kernen: Why do you have euros in Ireland? Shanahan: Why wouldn’t we have euros in Ireland? Quick: It is part of the E.U. Kernen: Huh? Quick: Part of the E.U. Kernen: I’d use the pound. Shanahan: No, we’ve had the euro for some time and we’re very happy with it. Kernen: What about Scotland? I was using Scottish, uh. … Shanahan: Scottish pounds, yeah. Kernen: Scottish pounds. Shanahan: They use sterling. Kernen: They use sterling? Shanahan: They use sterling. But we use euro. Kernen: What? Why would you do that? Shanahan: Why wouldn’t we do that? Kernen: Why didn’t Scotland? No wonder they want to break away. Shanahan: They’re part of the U.K., we’re not. Kernen: Aren’t you right next to, uh. … Shanahan: We’re very close but entirely separate, as you know well. Kernen: It is sort of the same — the same island, isn’t it? Shanahan: And in the North of Ireland they have sterling, but —— Kernen: They do … Shanahan: We use euro, yes. Kernen: It’s just too confusing. … Northern Ireland’s the pound? Shanahan: Northern Ireland’s the pound, yes. Kernen: Oh my God, you guys got to get it together over there.

Buyout Firms Push to Keep Information Under Wraps (WSJ)
Buyout firms, facing scrutiny from regulators on fees and expenses, are trying to keep details of those matters and many others from becoming public through freedom-of-information-law requests being made by journalists, unions, private citizens and others. They have been advising public pension funds to keep secret details about fees, interactions with regulators and other investment data.

Accused Russian Hacker May Be in U.S. Hands Soon (Bloomberg)
A Russian charged with leading the most prolific hacking ring to hit corporate America moved a step closer to a U.S. courtroom instead of the Dutch jail where he’s been held since his arrest two years ago. Vladimir Drinkman was indicted in July 2013 on charges of hacking 17 retailers, financial institutions and payment processors, including Nasdaq OMX Group Inc. (NDAQ), 7-Eleven Inc., Carrefour SA and J.C. Penney Co. (JCP) to steal more than 160 million credit- and debit-card numbers. Since then, the U.S. and Russia have waged a legal and diplomatic battle over where Drinkman, 34, must face justice. The U.S. wants him in federal court in New Jersey. Russia wants to put him on trial there for cybercrime fraud. Both nations seek to extradite him. The U.S. appeared to win today, when Dutch Justice Minister Ivo Opstelten approved Drinkman’s extradition to the U.S. because it asked 14 months earlier than Russia.

Hedgies are drying up like fall leaves (NYP)
One fund that made the top 20 losers on the latest HSBC hedge fund ranking was Jeffrey Altman’s Owl Creek. Altman’s fund was down 5.9 percent through Oct 24 and has lost 10.3 percent year to date. Other losers included Richard Perry’s Perry Partners, which fell 2.12 percent through Oct. 24, and is down 2.91 percent for the year, and Davidson Kempner, down 1.76 percent through Oct. 24 for a year to date return of 4.37 percent. Nelson Peltz, whose Trian Partners was down .13 percent through Oct. 24, still has a 6.1 percent gain this year.

Bid for Allergan Clears a Hurdle (WSJ)
A federal judge said Allergan Inc. raised “serious questions” about the legality of Pershing Square Capital Management LP’s and Valeant Pharmaceuticals International Inc. ’s joint $53 billion takeover bid, but he stopped short of blocking them from voting a 9.7% Allergan stake at a shareholder meeting next month. U.S. District Judge David Carter ordered Pershing Square and Valeant to make additional disclosures, including that he had found their alliance may violate federal insider-trading rules. But he declined to strip the shares of their voting rights, as Allergan had sought. Judge Carter said it was possible that Pershing Square’s purchase of Allergan shares—made weeks before Valeant unveiled its offer—broke federal laws meant to keep investors from profiting from advance knowledge of takeover plans. He said the trading was reminiscent of “warehousing” shares for the benefit of a not-yet-unveiled hostile bid, a practice that regulators have outlawed.

IMF’s Post-Crisis Austerity Call Mistaken, Watchdog Says (Bloomberg)
Where the fund went awry was in its 2010 shift away from recommending government stimulus to calling for budget cuts in the biggest advanced economies, according to a report released today by the IMF’s internal watchdog, the Independent Evaluation Office. That turn was inappropriate given the global recovery’s modest pace, the report said. The findings add credence to views of critics such as Nobel economics laureate Paul Krugman, who said in 2010 that austerity was a “terrible idea” at the time. The IMF has since shifted its position, calling on countries to step up infrastructure spending at its annual meeting last month. “The recommended policy mix was not appropriate, as monetary expansion is relatively ineffective in boosting private demand following a financial crisis,” according to the report. “Also, the IMF did not sufficiently tailor its advice to countries based on their individual circumstances and access to financing when recommending either expansion or consolidation.”

Canadian seeks woman with ex's name for world trip (UPI)
A Canadian Reddit user said he is seeking a woman with the same name as his ex to use her plane ticket on a round-the-world trip. Jordan Axani, 28, of Toronto, posted on the website that he bought tickets for the three-week trip to destinations including Milan, Paris, Bangkok and New Delhi shortly before he and his girlfriend broke up. "In March I booked a fairly wicked trip around the world for this Christmas for my ex and I," he wrote on Reddit. "While our relationship has come to a close, I am still planning on going on the trip and she is not (naturally). "And because I hate the idea of a ticket around the world going to waste, I am looking for a Canadian named Elizabeth Gallagher who could use the ticket." Axani wrote he isn't seeking any monetary or romantic compensation for the ticket. "I am not looking for anything in return, I am not looking for companionship, romance, drugs, a trade, or to take selfies with you in front the Christmas Market in Prague," he wrote. "If you feel compelled to toss me a couple hundred bucks, great. Really the only thing I ask for is that you enjoy this trip and that it bring you happiness."

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Opening Bell: 09.06.12

Draghi Says Officials Agree On ECB Unlimited Bond-Buying (Bloomberg) The program “will enable us to address severe distortions in government bond markets which originate from, in particular, unfounded fears on the part of investors of the reversibility of the euro,” Draghi said at a press conference in Frankfurt after the ECB held its benchmark rate at a record low of 0.75 percent. “Under appropriate conditions, we will have a fully effective backstop to avoid destructive scenarios with potentially severe challenges for price stability in the euro area.” Positive Signs Emerge For Job Market (WSJ) Private-sector jobs in the U.S. increased by 201,000 last month, according to a national employment report calculated by payroll processor Automatic Data Processing Inc. and consultancy Macroeconomic Advisers. The August number was well above the 145,000 expected by economists. The July estimate was revised to 173,000 from the 163,000 reported last month. AIG To Sell $2 Billion Of AIA Shares (WSJ) AIG is seeking to raise around US$2 billion by selling more shares in AIA Group Ltd, its former pan-Asian life insurance unit, as it continues to repay the U.S. government bailout it received during the 2008 financial crisis. The U.S. insurer also said in a statement it plans to buy back another $5 billion in stock from the U.S. Treasury. AIG has been aggressively buying back shares this year and is expected to buy more from the Treasury this fall, as part of a push that could make the U.S. government a minority shareholder before the November elections and enable the company to fully repay its bailout sooner than expected. The Treasury Department sold $5 billion worth of shares in AIG last month, its fourth sale so far, reducing the government's stake to 55% and bringing down the amount the government needs to recoup from the bailout to $25 billion. Summer Rally Puts The Hurt On Fund Managers (WSJ) "The gap we are looking at is going to be very hard…for hedge funds to make up," said Anurag Bhardwaj, head of hedge-fund consulting at Barclays PLC. "At this late stage in the year, when the rally has been around for a bit, do you decide to get into the game now?" Alec Baldwin's daughter discusses ‘pig’ call (NYP) Alec Baldwin’s daughter Ireland has talked for the first time about his infamous 2007 voice mail in which he called her, then 12, “a rude, thoughtless, little pig” — saying he often speaks like that “because he’s frustrated.” Ireland, the 16-year-old daughter of Baldwin and Kim Basinger, thinks the incident — which created a viral scandal and prompted Baldwin to temporarily lose visitation rights — was blown wildly out of proportion. “The only problem with that voice mail was that people made it out to be a way bigger deal than it was,” she tells Page Six Magazine, out today. “He’s said stuff like that before just because he’s frustrated. “For me it was like, ‘OK, whatever.’ I called him back I was like, ‘Sorry Dad, I didn’t have my phone.’ That was it.” DE Shaw Is Back On Top (DJ) This year, Shaw has had the biggest asset growth among the top 20 hedge fund firms in Absolute Return’s Billion Dollar Club, which tracks the biggest hedgies twice a year. Shaw added $2.4 billion to its hedge-fund coffers this year, a 14 percent gain, bringing its assets to $19.4 billion as of July 1, according to the ranking out today. Clinton Nominates Obama, Rebuts Romney Criticism On Jobs (Bloomberg) Bill Clinton said President Barack Obama deserves re-election because he contained the economic crisis and put the nation on a path to recovery, casting the 2012 election as a choice between “shared opportunities and shared responsibility” and a “winner-take-all, you’re-on-your- own society.” Clinton, 66, praised Obama’s commitment to “constructive cooperation” and described him as a man who is “cool on the outside, but who burns for America on the inside.” The former president used a 48-minute address before the Democratic National Convention in Charlotte, North Carolina, last night to deliver a rebuttal of criticisms leveled at Obama by challenger Mitt Romney and his running mate during last week’s Republican National Convention in Tampa, Florida -- at one point saying it “takes some brass” for Obama’s partisan adversaries to lob some of their attacks. “Nobody’s right all the time and a broken clock is right twice a day,” Clinton said. “We’re compelled to spend our fleeting lives between those two extremes.” Most Of Nomura's Cuts To Come In Europe, US (WSJ) The brokerage house said Thursday 45% of the cuts would be in Europe and 21% in the U.S. Nomura said 45% of the total cuts would be in the form of labor costs. Love Triangle Leads To Million-Dollar Return Battle At Neiman Marcus (FDL) The meeting was awkward. Malcolm Reuben, the buttoned-up vice president and general manager of Neiman Marcus’ NorthPark Center store, stood inside the multimillion-dollar Addison home of one of his top customers, Patricia Walker. Beside him were two colleagues: a Neiman Marcus attorney and his store’s loss-prevention manager. Walker was joined by her own attorney and her personal assistant. It was a summer day in 2010. Glancing around the sleek Max Levy–designed house, the only things more dazzling than the sculptural masonry columns or the steel-and-glass staircase were the piles of designer goods: handbags, shoes, furs, clothing, crystal figurines, fine jewelry. It represented the bulk of $1.4 million in merchandise charged to Walker over a period of years. “There was a variety of merchandise laying all over the house,” Reuben testified in a March video deposition. “She wanted to return all of the merchandise because of the affair.” Oh, yes. The affair. Walker had learned that Favi Lo, her longtime Neiman Marcus sales associate at NorthPark, was sleeping with her husband. And Walker saw that her charges had soared in recent years while she recovered from a horrific head-on auto collision. She came to believe that her husband was responsible for many of the purchases and had used them to pump up commissions for his mistress.

Opening Bell: 11.08.12

On Wall Street, Time To Mend Fences With Obama (NYT) Few industries have made such a one-sided bet as Wall Street did in opposing President Obama and supporting his Republican rival. The top five sources of contributions to Mr. Romney, a former top private equity executive, were big banks like Goldman Sachs and JPMorgan Chase, according to the Center for Responsive Politics. Wealthy financiers — led by hedge fund investors — were the biggest group of givers to the main “super PAC” backing Mr. Romney, providing almost $33 million, and gave generously to outside groups in races around the country. On Wednesday, Dan Loeb, who had supported Mr. Obama in 2008, was sanguine. “You win some, you lose some,” he said in an interview. “We can all disagree. I have friends and we have spirited discussions. Sure, I am not getting invited to the White House anytime soon, but as citizens of the country we are all friendly.” [...] “Wall Street is now going to have to figure out how to make this relationship work,” said Glenn Schorr, an analyst who follows the big banks for the investment bank Nomura. “It’s not impossible, but it’s not the starting point they had hoped for.” Morgan Stanley Reassures Its Bankers (WSJ) The New York bank said Monday that investment-banking chief Paul Taubman would leave the firm at year-end. Mr. Taubman was passed over for a new job overseeing both the trading and investment-banking operations, people involved in the process said. The position went to Colm Kelleher, who has overseen sales and trading. To calm nerves and soothe egos among the firms' bankers, Morgan Stanley gathered its new team of investment-banking leaders in New York this week. Mr. Kelleher and one of his new banking lieutenants, Franck Petitgas, traveled from their London office, and Mr. Petitgas spent much of the week meeting with managers in the investment-banking division and senior bankers, people familiar with the discussions said. Top executives reassured senior bankers Monday that the investment-banking business was a priority for Morgan Stanley. In a memo to employees, Chief Executive James Gorman said Morgan Stanley would "continue to build on our leadership position in investment banking and capital markets." The messages came as some rank-and-file bankers at Morgan Stanley privately expressed surprise and dismay at the news from Mr. Taubman, who announced his departure to colleagues in an emotional meeting Monday with Messrs. Kelleher and Gorman in attendance. Some Morgan Stanley bankers said they worried that the new chiefs of investment banking didn't have the stature of Mr. Taubman, who spent a significant amount of time as a mergers banker and was known internally for his staunch support of the firm's investment-banking franchise. "People are upset," one senior person inside the company said. Wall Street Trades Foiled Romney Dreams For Bowles Hopes (Bloomberg) Wall Street executives who lost a bet that Republican Mitt Romney would defeat President Barack Obama are bracing for tougher regulation and hoping a deal can be struck with Congress to cut the deficit. Obama’s choice to succeed Treasury Secretary Timothy F. Geithner will be watched closely for signs about the administration’s approach to business and the deficit, industry executives said. Erskine Bowles, who served as chief of staff under former President Bill Clinton, would be a sign that Obama is willing to endorse a bipartisan debt-reduction plan supported by many business leaders, they said. “With the appointment of the Treasury secretary, Obama will be sending an important message to the public and to the foreign governments who own a lot of Treasuries,” Curtis Arledge, chief executive officer of Bank of New York Mellon Corp.’s investment-management arm, which oversees $1.4 trillion, told journalists in New York yesterday. “If he goes with somebody like Erskine Bowles, then the message will be that he cares about the deficit and is serious about cutting it.” Focus Shifts To Fiscal Cliff (WSJ) Barry Knapp, head of U.S. equity portfolio strategy at Barclays, turned more bearish after seeing the election results, arguing that the risk of fiscal-cliff disaster increased to more than half, from about 30% before. "When I look at what happened, I see a government that grew farther apart, which might be worse than the status quo," Mr. Knapp said. "The risk of going off the cliff has just gotten huge." Jobless Claims Fall (WSJ) Initial jobless claims, which are a measure of layoffs, decreased by 8,000 to a seasonally adjusted 355,000 in the week ended Nov. 3, the Labor Department said Thursday. Economists surveyed by Dow Jones Newswires expected 365,000 new applications for jobless benefits. Greek Jobless Rate Hits New High (WSJ) Elstat, the Greek statistical agency, Thursday said the seasonally adjusted rate of unemployment increased to 25.4% from 24.8% in July and 18.4% in August 2011. That was just below the 25.5% unemployment rate recorded by Spain in the same month, the highest in the European Union. Herd of elephants go on drunken rampage after mammoth booze up (Metro) The trunk and disorderly mammals ransacked a shop, three houses and ruined crops in the eastern village of Dumurkota, India. Police say the gang of over-the-limit tuskers downed more than 500litres of moonshine alcohol, managing to drink the place dry in a matter of minutes. The unruly mob demolished dozens of houses in their desperate hunt for more booze after hoovering up the hard stuff in record time. Local police officer Asish Samanat said the drunken elephants were more 'aggressive' than usual after their mammoth drinking session. 'Unfortunately these animals live in close proximity to man and they recognised the smell of the drink,' he explained. 'They were like any other drunk - aggressive and unreasonable but much, much bigger.' ECB Stands Ready to Buy Bonds as Economy Weakens (Bloomberg) “We are ready to undertake” Outright Monetary Transactions, “which will help to avoid extreme scenarios,” Draghi said today at a press conference in Frankfurt after policy makers left the benchmark interest rate at a historic low of 0.75 percent. “The risks surrounding the economic outlook remain on the downside” and underlying inflation pressures “should remain moderate,” he said. SocGen CEO Blames ‘Stupid’ Accounting for Profit Drop (CNBC) “Exceptional items are related in particular to this stupid accounting thing which means that when you have a credit that is improving, your CDS is going down and you have to recognise negative revenues,” Frederic Oudea told CNBC in Paris. SocGen’s third-quarter net profit was 85 million euros, down by 86 percent on the same period in 2011, after losses on asset sales. That was lower than analysts’ mean estimate of 139.1 million euros. Blackstone Leads Hedge Funds Attracting Bond-Rally Bears (Bloomberg) Funds that bet on both gains and losses in credit attracted $12.6 billion of deposits in the three months ended Sept. 30, the most since the period ended Dec. 31, 2007, according to HFR. Blackstone Group LP raised $4.05 billion during the period for its debt unit, which includes so-called long-short funds. Panning Capital Management, which was founded by Kieran Goodwin this year, started such a fund on Nov. 1 with $500 million. Two-Tier Global Housing Market Could Lead to Bubble: Goldman (CNBC) In a report titled: “Just don’t look down some house markets are flying again” Goldman argues easy money policies by the world’s major central banks has had a ripple effect on countries which have avoided the worst of the global financial crisis, boosting their house prices. According to Goldman, there now exist housing “high-flyers” - countries that have experienced real house price increases and “low-lyers” - countries where the housing market downturn appears to be more protracted. “High flyers” include Germany, Finland, Norway, France, Switzerland and Israel as well as Canada and Australia. The “low lyers” include the U.S., and the euro zone periphery of Spain, Greece, Italy and Ireland- but also those places where prices fell in the post-crisis period but have since stabilized such as the U.K., Japan and Denmark. Judge throws Dallas attorney back in jail after his Design District office trashed, vandalized with obscene drawings (DN) Attorney Tom Corea was charged earlier this year with four felonies alleging he stole from his clients. He was arrested, posted bond and was released. Weeks later, he was evicted for not paying rent for his upscale office in the 2000 block of Farrington Street near Interstate 35E and Market Center Boulevard, according to testimony before state District Judge Mike Snipes. Corea was ordered out by Oct. 31. When the president of the real estate company that represents the building, Doug Molny, showed up the next day to check out the property, he found “complete destruction,” including “penis graffiti on every single wall throughout the building,” Molny said. Written next to some of the penises was the name Doug. Molny said it appeared someone took a sledgehammer to granite counters. Additionally, doors, light fixtures, cabinets and appliances were destroyed or removed.

Opening Bell: 11.30.12

Germany Approves Greek Aid (WSJ) German parliamentarians approved with an overwhelming majority a package of new aid measures for Greece Friday, clinching support for a plan to close a €14 billion ($18.17 billion) gap in the heavily indebted nation's finances and to ready a near €44 billion tranche of promised aid. The vote shows that German Chancellor Angela Merkel has been able to consolidate the support of her center-right coalition of Christian Democrats and Free Democrats, many of whom have expressed skepticism that Greece can be saved without significant costs to German taxpayers. Her coalition voted 90% in favor of the measures. Leave "fairy world" behind, Draghi tells euro zone (Reuters) "We have not yet emerged from the crisis," Draghi told Europe 1 radio. "The recovery for most of the euro zone will certainly begin in the second half of 2013." "The crisis has shown that we were living in a fairy world," the ECB chief later added at a conference with top financial officials, pointing to the unsustainable debts, weak banks and poor policy coordination that gave birth to the crisis three years ago. Obama Takes ‘Fiscal Cliff’ on the Road; Republicans Stew (CNBC) President Barack Obama, reapplying his re-election campaign theme of protecting the middle class, heads to Pennsylvania on Friday suggesting that Republicans could spoil Christmas by driving the country over the "fiscal cliff." The president's road trip, visiting a factory that makes Hasbro's [HAS 38.60 --- UNCH] Tinkertoys, is infuriating Republicans. House Speaker John Boehner called it a "victory lap" as he rejected Obama's proposals to avoid the cliff, the combination of tax increases and spending cuts set to start taking effect in January. Berkshire Hathaway, CaixaBank Agree to Reinsurance Deal (WSJ) Berkshire Hathaway will pay CaixaBank SA million €600 million ($778.7 million) for the future cash flow from a portfolio of life insurance policies, the Barcelona-based bank said Friday, a rare dip into a fiscally stressed euro-zone country for the investment firm run by Warren Buffett. If You Like Late Nights, Try Being an Analyst in Hungary (WSJ) As the clock ticked toward midnight on a recent night, stock analyst Gergely Gabler sat sleepily in his pajamas at the small desk in his bedroom, waiting. Then, just after 12, he sprang into action, evaluating the newly released earnings report of Hungary's largest bank. For the next two hours, Mr. Gabler worked on a report about OTP Bank's performance for clients of his firm, Hungarian brokerage Equilor Investments, before catching some shut eye, only to awake about 3½ hours later so he could be in his office to field questions by 7 a.m. Burning the midnight oil is a painful quarterly tradition for analysts and financial journalists in Hungary, where the country's biggest blue-chip companies publish their results in the wee hours, after markets in New York have closed and long before they open anywhere in Europe. "I'm a night owl, so I don't mind staying up," Mr. Gabler said. The hard part, the 28-year-old said, is getting out of bed the next day. That morning, he grabbed a red-and-black can of Hell, a caffeine-laden Hungarian energy drink, to fuel his workday. Moody's Puts Aston Martin on Watch for Downgrade (NYT) “The review was prompted by a significant deterioration in Aston Martin’s liquidity profile as per end September 2012, caused by a much weaker cash generation and operating performance in the third quarter than anticipated by the company and compared to Moody’s expectations,” Falk Frey, a Moody’s analyst, said in a statement. Harvard Approves BDSM Group (Crimson) It started last October with a meal in Currier dining hall with a handful of friends who shared something in common: an affinity for kinky sex. More than a year after the group first began informally meeting over meals to discuss issues and topics relating to kinky sex, Harvard College Munch has grown from seven to about 30 members and is one of 15 student organization that will be approved by the Committee on Student Life this Friday. Michael, who was granted anonymity by The Crimson to protect his privacy, is the founder of Munch, an informal lunch or dinner meeting for people across the kink community. For him, the recognition will provide a sense of ease for current and future members, knowing they are receiving institutional support. “It’s a little hyperbolic for me to get teary-eyed and paternal about sophomores, but it’s really a joy to see the experience they will have now,” Michael said. Michael said there are many benefits to being officially recognized on campus such as being able to poster for events and promote Munch’s presence...But for Michael, the biggest advantage to being recognized comes with “the fact of legitimacy,” he said. “[Our recognition] shows we are being taken seriously.” Mae, a member of the organization who asked to be identified by her middle name, said since its formation the group has provided her with a comfortable space to discuss her interests. “I didn’t think that anyone was even remotely interested [in kink] on campus,” Mae said. “It’s a community where you can feel safe, and you can feel comfortable talking about [kink].” Cohen's Damage Control (NYP) Beleaguered hedge fund honcho Steve Cohen held a conference call yesterday for his roughly 1,000 employees to explain potential civil charges against his firm, SAC Capital Advisors. The call with SAC’s employees went over similar talking points as the call with investors the previous day, according to a person familiar with the call. In the latest call, officials notified employees that last week, the $14 billion Stamford, Conn., hedge fund received a Wells Notice from the Securities and Exchange Commission tied to trading by a former portfolio manager who was arrested Nov. 20 on insider trading charges. McDonald’s Starved for Ideas as Burger King Lures Diners (Bloomberg) Burger King has been excelling at a game McDonald’s worked to perfect years ago, introducing a steady stream of new menu items, such as snack wraps and gingerbread sundaes for the holidays. McDonald’s has “not had anything to talk about of substance,” Michael Kelter, a New York-based analyst at Goldman Sachs Group Inc., said in an interview. “People are going elsewhere.” Hong Kong IPOs Generate Little Excitement (WSJ) Hong Kong appears unlikely to regain its position as the world's top venue for initial public offerings anytime soon. In recent days, the city's biggest IPO in two years drew only lukewarm support, while another deal ran up against insufficient demand and a third was postponed. Recession Left Baby Bust as U.S. Births Lowest Since 1920 (Bloomberg) The country’s birth rate fell 8 percent from 2007 to 2010, according to a Pew Research Center report. The rate dropped 6 percent for U.S.-born women and plummeted 14 percent for foreign-born females since 2007, the onset of the worst economic downturn since the Great Depression. The decline continued last year to the lowest point since records began in 1920. Rogue caviar fugitive Mario Garbarino admits his guilt in fishy egg smuggling scheme (NYDN) Isidoro (Mario) Garbarino, 69, who went on the lam 23 years ago pleaded guilty Thursday to smuggling $10 million worth of Russian and Iranian savruga and beluga to New York more than two decades ago. Garbarino’s plea deal requires him to pay $3 million in restitution. He also faces up to four years in prison when he is sentenced in January. Garbarino, a supplier to fancy gourmet shops including Zabar's, was indicted in 1987 for cheating the government on import duties. Feds say his Bronx company, Aquamar Gourmet Imports, engaged in an elaborate scheme to smuggle more than 100,000 pounds of the expensive delicacy from 1984 to 1987. As part of the plot, Garbarino switched the high-quality caviar with much cheaper American caviar which he then sold to Pan Am, other airlines and cruise ships operators as the real thing. In 1989, Garbarino fled. He was nabbed two months ago in Panama and extradited to New York. "Isidoro Garbarino ran his high-end importation business in a low-end way — cheating the government out of millions of dollars in tax revenues and defrauding his international clients who paid top dollar for exotic caviar they did not receive," said Manhattan U.S. Attorney Preet Bharara...Garbarino admitted he “occasionally misrepresented the nature of the caviar” to avoid paying the required taxes.

Opening Bell: 11.05.12

Wall Street Pay Rises (WSJ) Wall Street pay will bounce in 2012 from last year's sharply reduced levels, but bonuses will be lower and have more strings attached than before the financial crisis, the latest tally of finance-industry compensation shows. So-called incentive-based pay, which includes cash and stock awards, is set to be flat to up 5% to 10% from a year earlier, according to a forecast set to be released Monday by consulting firm Johnson Associates. At the same time, financial firms are keeping a lid on cash outlays by deferring more pay and trimming their workforces...Many securities-industry employees still rake in far more in pay than most other professions. But gone are the days when scores of star traders would get million-dollar, year-end windfalls. The average managing director is set to take home about $930,000 in total pay for 2012, up 3.3% from $900,000 a year ago but down about 23% from $1.2 million in 2010...Reflecting a big rebound from last year's plunge, the survey said bond traders—among the hardest hit in terms of pay in 2011—could see their bonuses rise 10% to 20%, even though several firms are scaling back fixed-income trading operations. Investment bankers and equity traders may receive as much as 10% less in bonuses than last year. Equity volumes remain weak, while global merger and acquisition volume is down 16% to $1.7 trillion through the first nine months of the year, according to Thomson Reuters. Goldman Sachs Partner List Drops 31 Since February, Filing Shows (Bloomberg) Some of the names missing from the latest filing had already been reported, such as former Securities Division Co- Head David B. Heller and Lucas van Praag, the former head of corporate communications. Others hadn’t been announced. Economy Set for Better Times Whether Obama or Romney Wins (Bloomberg) Mitt Romney says Barack Obama’s policies will consign the U.S. to an extended period of sluggish economic growth, at best. The president says his Republican challenger’s plans will sow the seeds of another mammoth recession. Both are wrong. No matter who wins the election tomorrow, the economy is on course to enjoy faster growth in the next four years as the headwinds that have held it back turn into tailwinds. Consumers are spending more and saving less after reducing household debt to the lowest since 2003. Home prices are rebounding after falling more than 30 percent from their 2006 highs. And banks are increasing lending after boosting equity capital by more than $300 billion since 2009. “The die is cast for a much stronger recovery,” said Mark Zandi, chief economist in West Chester, Pennsylvania, for Moody’s Analytics Inc. He sees growth this year and next at about 2 percent before doubling to around 4 percent in both 2014 and 2015 as consumption, construction and hiring all pick up. Chanos Unmoved by Chinese Banks’ Biggest Rally Since Jan. (Bloomberg) The biggest monthly surge in Chinese banks since January isn’t enough to stop Jim Chanos from shorting the financial shares as the portfolio manager wagers the country faces a credit crisis as bad loans increase. “You can’t look at a month and say that’s the trend, or something’s changed,” Chanos, who oversees $6 billion as the founder and president at Kynikos Associates Ltd., said in a Bloomberg television interview. Bad loans peaking at 3 percent, “seems awfully Pollyannic,” he said. Merkel: Euro Debt Crisis Will Last 5 Years Or More (Reuters) Merkel says the continent is on the right path to overcome the crisis but "whoever thinks this can be fixed in one or two years is wrong." Europe's Bank Reviews Collateral (WSJ) The issue involves about €80 billion in Spanish Treasury bills the ECB accepted as collateral for its loans. The ECB applies different discounts, or haircuts, to collateral based on the quality of the asset being posted. The Treasury bills under question were given the highest collateral rating, but Welt am Sonntag's research suggests many of the securities should have been given a lower rating, meaning more bills would have needed to be posted to obtain the same amount of ECB credit. If the ECB eventually were to downgrade the securities, banks would have to provide additional collateral to cover the nearly €17 billion in ECB loans they have received. The issue could prove to be embarrassing to the ECB if it is forced to admit it wasn't strict enough in enforcing its rules. Jeep Driven By Suspected Smugglers Gets Stuck Atop U.S.-Mexico Border Fence (TSG) A harebrained attempt by suspected smugglers to drive a Jeep Cherokee up and over a U.S.-Mexico border fence failed early Tuesday when the vehicle got stuck atop the 14-foot tall barrier. As seen above, the teetering SUV was spotted by U.S. Border Patrol agents after it had been driven up a makeshift ramp, but could not complete the trip’s final leg into Arizona. When agents approached the vehicle, two individuals on the fence's Mexican side fled. Investigators suspect that the Jeep likely contained narcotics, which were offloaded when the vehicle became stuck. Rochdale Says Bad Apple Trade Led to Rescue Bid (WSJ) "Rochdale had an unauthorized trade that left us with a negative capital position. We are in talks that would result in a healthy balance sheet, and we expect to be trading maybe as early as Monday," said Rochdale President Daniel Crowley. He said the unauthorized trading was in shares of Apple, and that, as of Saturday evening, the company was in talks with two firms for a possible injection of capital. He declined to offer more details on the unauthorized trading. S&P Found Liable by Australia Court for Misleading Rating (Bloomberg) Standard & Poor’s misled investors by giving its highest rating to securities whose value plunged during the global credit freeze, a judge ruled in an Australian case that may be cited in lawsuits around the world. S&P was “misleading and deceptive” in its rating of two structured debt issues in 2006, Federal Court Justice Jayne Jagot said in a summary of her ruling released today in Sydney. The Australian municipalities that brought the case are entitled to damages from the credit ratings company and two other defendants, ABN Amro Bank NV and Local Government Financial Services Pty., according to the ruling. Banks Going Low-Tech In Aftermath Of Sandy (WSJ) Sandy's devastating force has led many of the banks lying in its path to resort to old-fashioned, low-tech ways of serving their customers—including stocking up on cash and recording transactions by hand with ink and paper. Hulk Hogan: Bubba the Love Sponge and I 'are NOT friends and never will be friends' after sex tape leak (NYDN) They may have settled their sex tape brawl, but Hulk Hogan and Bubba the Love Sponge Clem aren’t rekindling their former friendship, the wrestling star claimed Friday. “Just for the record, Bubba and I are NOT friends and never will be friends, we are NOT friends,” Hulk Hogan said of the Florida shock jock in a Twitter message. Hogan sued Bubba Oct. 15 for invasion of privacy after grainy footage of the mustachioed muscleman having sex with Bubba’s wife surfaced on Gawker.com...Hogan, 59, maintained he was unaware of any camera and that the leak of the 6-year-old recording, made with Bubba’s consent while the wrestler’s ill-fated marriage to ex-wife Linda Hogan was on the rocks, was a devastating blow.