Opening Bell: 11.26.14

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Jefferies Bumps Up Against Big Rivals as It Looks to Expand (WSJ)
As Jefferies evolves from its roots as a trading firm to a midtier investment bank, it is knocking up against far larger financial firms vying for business, often from companies Jefferies helped to expand. Jefferies has often worked with smaller firms on transactions that bigger rivals may not pursue. As these customers get larger, the competition intensifies as they are courted by bigger financial firms. In 2014, Jefferies has been a lead underwriter on 25 U.S.-listed initial public offerings of health-care-related companies, topping all other investment banks, according to data provider Dealogic. But Jefferies ranks just eighth in net revenue generated by U.S. health-care banking overall—which includes stock and bond offerings, loans and merger advice—generating $196 million in revenue, trailing No. 1 J.P. Morgan Chase & Co.’s $639 million. “Investment banking has always been highly competitive,” Jefferies Chief Executive Richard Handler said in an interview at his office, just off the trading floor. The firm isn’t attached to a bank holding company and therefore has more flexibility in how it structures deals and compensates employees. This entrepreneurial structure was part of the allure when Mr. Lorello moved to Jefferies in 2009 with more than 30 health-care bankers, according to people familiar with the firm. Jefferies is a unit of Leucadia National Corp. and has net revenue topping $3 billion. “Our competitive advantage has never been stronger in the 25 years I have been at Jefferies,” Mr. Handler said.

Steven Cohen’s Ex-Wife Gets Outside Financing for Lawsuit (Dealbook, related)
Helping to fuel the long-running legal battle is Asta Funding, a financial backer of a Beverly Hills, Calif., firm that has provided litigation financing to Ms. Cohen, according to court documents and people briefed on the matter. Asta and the firm that is financing Ms. Cohen’s lawsuit — Balance Point Divorce Funding — have an agreement to share in the proceeds of legal recoveries by clients. All of this would appear to give investors in Asta, a publicly traded company based in Englewood Cliffs, N.J., a reason to cheer on Ms. Cohen, whose lawyers are scheduled to take a deposition from Mr. Cohen on Dec. 10. Balance Point, founded in 2009 by Stacey Napp after her own acrimonious divorce, signed a deal with Ms. Cohen in the summer of 2013 to provide Ms. Cohen with about $1.2 million to continue her litigation, said people briefed on the matter but not authorized to speak about a private transaction. While the specific terms of Balance Point’s arrangement with Ms. Cohen could not be determined, court filings in an unrelated lawsuit reveal it is common for Balance Point to get up to 25 percent of any legal recovery by a client in return for the financing provided. Balance Point is part of a niche business that provides financing in drawn-out matrimonial cases to litigants with wealthy spouses. Only a handful of companies provide such financing in the United States.

Uber Said Close to Raising Funding at Up to $40B Value (Bloomberg)
T. Rowe Price Group Inc. is in discussions to be a new investor, said the people, who asked not to be identified because the details are private. Existing investor Fidelity Investments is also set to participate in the funding, they said. Uber is raising at least $1 billion, the people said.

Shorting Chickens Becomes Hot Trade After Prices Surge (Bloomberg)
Short sellers have found a new asset to bet against: chickens. With no futures market to speculate on chicken-price movements, they’re turning to the equity market, borrowing record amounts of shares of two U.S. poultry producers that they in turn sell in anticipation of declines. The percentage of outstanding shares of Pilgrim’s Pride Corp. (PPC), the second-biggest U.S. chicken producer, that were sold short by investors has soared more than six-fold since Sept. 30, while the ratio for Sanderson Farms Inc. (SAFM) has almost doubled. The success, or failure, of the trade comes down largely on whether the eight-month surge in chicken, which has fattened producers’ profit margins, is over or not.

U.K. Banks Seen Facing Decades to Tackle `Toxic Culture' (Bloomberg)
U.K. banks will need at least two decades to clean up a “toxic culture” that has cost them more than 38.5 billion pounds ($60 billion) in fines and compensation, Cass Business School said in a report. Banks were forced to make provisions of at least 27 billion pounds to compensate customers for improperly sold insurance products from 2010 to 2014, according to the report commissioned by New City Agenda. The mis-selling of interest-rate hedging products has cost lenders 4.1 billion pounds. “It has become clear that having an aggressive sales culture, which ripped-off customers, has cost banks dearly,” David Davis, a Conservative member of Parliament, said in the statement. “A toxic culture which was decades in the making will take a generation to turn around.”

Siberian police consider deputizing reindeer (AP)
Officials in northwest Siberia said police could soon be deputizing reindeer to help chase down criminals in the region. Irina Pimkina of the Yamalo-Nenets region's Interior Ministry said police in the area, which is located in Russia's Arctic tundra, often find themselves at a disadvantage when chasing down local criminals, who often employ reindeer as getaway rides. "Of course we have snowmobiles in service, but one should understand that a machine is a machine," Pimkina told the Izvestia newspaper. "A snowmobile can break down or get stuck in the tundra, but the deer will run at all times." The deer would join the animal ranks of about 150 donkeys and mules employed by the Russian Defense Ministry to serve in mountain brigades. The legislation governing the animals also allows for reindeer to be used for law-enforcement purposes.

JPMorgan Data Breach Shows Need for Global Crackdown, ASIC Says (Bloomberg)
Markets regulators across the world must work together to counter cyber crime as the attack on JPMorgan (JPM) Chase & Co. exposes the risks posed by hackers, according to the head of Australia’s financial markets watchdog. “Cyber crime is a global problem that requires a global solution,” Greg Medcraft, chairman of the Australian Securities and Investments Commission, said in the text of a speech at Bloomberg’s Sydney office today. “The links between market players and infrastructure mean that the impact of a cyber attack can spread quickly and has the potential to dangerously affect the integrity and efficiency of global markets.”

Carl Icahn raises stake in car rental company Hertz (Reuters)
Activist investor Carl Icahn raised his stake in U.S. car rental company Hertz Global Holdings Inc to 10.77 percent from 8.48 percent. The billionaire was already Hertz's largest shareholder and in the past few months had successfully pushed for management changes and won board seats on the company.

In Moscow, a Financial District in Name Only (NYT)
In the coveted corner office, a bearded man in sweatpants scrambled eggs at a kitchenette, all the while taking in the serene beauty of the city lights twinkling far below. In the conference room, or as the company prefers to call it, the “common area,” two other men lounged about playing video games on an Xbox. In place of cubicles, there are bunk beds. High Level Hostel, one of the newest tenants in the financial district here known as Moscow City, sits on prime real estate on the 43rd floor of a multimillion-dollar glass-and-steel tower. It is not a youth-hostel-themed work space, but an actual youth hostel — dirty socks and all. “We thought, ‘why not open a hostel in a skyscraper?’ ” said Roman Drozdenko, the 25-year-old owner. “Nobody’s done that before.” The tower, with its marble veneer foyer, banks of elevators and breathtaking views, was clearly built for lawyers, accountants or stock traders. But “there were no questions regarding our guests” from the building management when he opened in September, Mr. Drozdenko said. “In fact, there were no questions at all.”

Joey Fatone helps break pillow fighting record (UPI)
The Guinness World Record for largest pillow fight was broken at South Dakota State University with 4,201 people, including NSYNC's Joey Fatone, organizers said. Motel chain Super 8, which sponsored the attempt Saturday to celebrate its 40th anniversary, said the number of participants topped the previous record, set only a few months ago, by just one person. The attempt took place Saturday at Coughlin-Alumni Stadium during a game against rivals University of South Dakota. Fatone gave a countdown on the stadium's screen and the pillow fight then lasted for the Guinness-mandated 60 seconds. "Super 8 came to me with the whole idea as far as coming here and kind of kicking it off," Fatone told KSFY-TV. "I think due to the fact that with me, what you see is what you get. I'm always energetic, always have fun, so they said, 'we'd love to have Joey Fatone and start off the fun.' I said, 'Hey, I'm all for it, so let's do it.'"

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Opening Bell: 3.2.15

Warren Buffett hates investment bankers, loves Ajit Jain and Greg Abel; Citi CEO might get to keep his job, might not; Dennis Kozlowski is a free man; Wall Street burger club; Cap'n Crunch Donut Holes; AND MORE.

Opening Bell: 12.03.12

Fiscal Cliff Talks At Stalemate (WSJ) Leading figures on both sides doubled down on their positions in interviews that aired Sunday, and they blamed each other for the current standoff, reflecting the talks that House Speaker John Boehner (R., Ohio) told "Fox News Sunday" have gone "nowhere." Treasury Secretary Timothy Geithner, speaking on the same program for the Obama administration, suggested Republicans needed to take a breather from negotiations but would ultimately agree to raise tax rates—a key White House demand that is part of its push to raise $1.6 trillion in taxes over 10 years. "It's obviously a little hard for them now, and they're trying to figure out where they go next, and we might need to give them a little time to figure out where they go next," Mr. Geithner said. Geithner Joins Boehner to Trade Blame on Fiscal Cliff Talks (Bloomberg) “There’s not going to be an agreement without rates going up,” Geithner said in a taped interview that aired Sunday on CNN’s “State of the Union.” Republicans will “own the responsibility for the damage” if they “force higher rates on virtually all Americans because they’re unwilling to let tax rates go up on 2 percent of Americans.” Clock Ticks For SAC Investors (WSJ) Seventy-five days remain until Feb. 15, the date by which investors must tell SAC whether they want to pull money from the firm during the next redemption period...Some investors already decided to pull out. French bank Société Générale SA, which has client money in SAC through its Lyxor asset-management arm, has put in a request to pull its money from the firm, according to people familiar with the matter. It is unclear how much money Lyxor has in SAC. Many, however, said they would reserve judgment, at least for now. Ironwood Capital Management, a San Francisco-based investment firm with client money in SAC, has been in touch with investors about the position and is monitoring the situation, said a person familiar with the firm. Last week, a unit within Morgan Stanley's MS +0.06% asset-management arm that has client money with SAC sent a note telling employees it would monitor the situation and be in touch frequently with SAC, according to a person familiar with the bank...Greycourt & Co., Inc., a Pittsburgh-based firm that manages about $9 billion for wealthy families, says it is sticking with SAC. Greycourt cited the stellar long-term returns of the firm, what it says is a robust compliance staff at SAC, Mr. Cohen's promise to cover any penalties himself and a belief that the firm's investment portfolio would be well-protected, even if it eventually faces charges. "The SAC portfolio is liquid enough that I'm not terribly concerned," says Gregory Curtis, Greycourt's chairman. "I very much hope that [Mr.] Cohen hasn't been behaving badly, but either way I'm not too concerned about our client positions." UK’s Euro Trade Supremacy Under Attack (FT) The City of London should be deposed as the euro's main financial center so the single currency club can "control" most financial business in the euro zone, France's central bank governor has said. Christian Noyer of the Banque de France said there was "no rationale" for allowing the euro area's financial hub to be "offshore", in a blunt assessment that will fan UK concerns over EU rules being rigged against it. "Most of the euro business should be done inside the euro area. It's linked to the capacity of the central bank to provide liquidity and ensure oversight of its own currency," Mr Noyer told the Financial Times while touring Asia to promote Paris as a renminbi trading center. "We're not against some business being done in London, but the bulk of the business should be under our control. That's the consequence of the choice by the UK to remain outside the euro area." Zoe Cruz trying to make a return to high finance, has reconciled with John Mack (NYP, earlier) Sources say Cruz has reconciled with her former boss Mack, who helped fuel her rise within their firm before their falling out. He has been helping his one-time protégée in her efforts to land at a buyout firm such as KKR. Mack also has been a shoulder for Cruz to lean on as she copes with the split from her husband Ernesto Cruz...[who] was once reprimanded by his superiors in the mid-2000s for frolicking in a hotel pool in Midtown after a company Christmas gala with a group of female assistants, according to sources familiar with the situation. SEC Chief Delayed Rule Over Legacy Concerns (WSJ) Internal SEC emails, released to a congressional panel and reviewed by The Wall Street Journal, appear to show how a last-minute intervention by a consumer lobbyist might have helped persuade Ms. Schapiro to change her mind and delay one of the centerpiece measures of the Jumpstart Our Business Startups, or JOBS, Act. In Panicky Russia, It’s Official: End of World Is Not Near (NYT) There are scattered reports of unusual behavior from across Russia's nine time zones. Inmates in a women's prison near the Chinese border are said to have experienced a "collective mass psychosis" so intense that their wardens summoned a priest to calm them. In a factory town east of Moscow, panicked citizens stripped shelves of matches, kerosene, sugar and candles. A huge Mayan-style archway is being built — out of ice — on Karl Marx Street in Chelyabinsk in the south. For those not schooled in New Age prophecy, there are rumors the world will end on Dec. 21, 2012, when a 5,125-year cycle known as the Long Count in the Mayan calendar supposedly comes to a close. Russia, a nation with a penchant for mystical thinking, has taken notice. Last week, Russia's government decided to put an end to the doomsday talk. Its minister of emergency situations said Friday that he had access to "methods of monitoring what is occurring on the planet Earth," and that he could say with confidence that the world was not going to end in December. He acknowledged, however, that Russians were still vulnerable to "blizzards, ice storms, tornadoes, floods, trouble with transportation and food supply, breakdowns in heat, electricity and water supply." Similar assurances have been issued in recent days by Russia's chief sanitary doctor, a top official of the Russian Orthodox Church, lawmakers from the State Duma and a former disc jockey from Siberia who recently placed first in the television show "Battle of the Psychics." One official proposed prosecuting Russians who spread the rumor — starting on Dec. 22. Old testimony may bite Cohen in SEC case (NYP) Steve Cohen’s sworn testimony in another legal skirmish could come back to haunt his $14 billion hedge-fund empire...In 2011, Cohen gave several days of deposition testimony in the civil fraud case, in which Fairfax sued SAC and other firms for allegedly conspiring to drive down its share price. The case was dismissed due to a lack of evidence, but the testimony offers a rare look into Cohen’s views on illegal trading. In his testimony, Cohen called SEC rules on insider trading “vague” and said he doesn’t expect his employees to follow the company’s internal compliance manual to the letter. When asked whether it was “legal or illegal to trade on material nonpublic information,” Cohen said: “It depends on the circumstance.” “So there are circumstances, in your view, in which it is legal . . . to trade on the basis of material, nonpublic information?” asked Fairfax ’s lawyer, Michael Bowe. “Yes,” Cohen said. Among them, he said, is when employees trade in the opposite direction of the nonpublic information they receive. He also said he didn’t expect employees to adhere to the company’s compliance manual in every situation. “See, we don’t operate our firm in absolutes,” he said. “When I look at this manual, I see guidelines.” Morgan Stanley trader probed over trades made while at Goldman (Reuters) Morgan Stanley trader Edward Glenn Hadden is under investigation by regulators at CME Group over trades in Treasury futures four years ago while he was employed by Goldman Sachs, according to a regulatory filing. Hadden is a managing director and head of global interest rates products at Morgan Stanley. Prior to joining Morgan Stanley, Hadden was a partner at Goldman Sachs, and head of government bond trading. Hedge Funds Increase Bullish Bets Most Since August (Bloomberg) Hedge funds increased bullish bets on commodities by the most since August as evidence that China is accelerating outweighed concern that U.S. lawmakers have yet to resolve an impasse over automatic spending cuts and tax rises. Krawcheck, possible SEC head, raises Washington (Reuters) ...many who have worked with her say Krawcheck was a smart, analytical and competent executive who not only knew the business, but was good at building consensus among different units of companies. She helped restore brokerage Smith Barney's reputation at Citigroup and was popular with many of the financial advisers at Merrill Lynch. Schumer and other lawmakers contacted by Reuters did not return calls or requests for comment about meetings with Krawcheck or their thoughts about her. In the end, of course, Krawcheck may not land in Washington at all, two people who know her said. She has had discussions about a variety of roles with several companies, one source said. "She has lots of balls in the air," said the source, who asked not to be named because the conversations were private. "Sallie always has a plan." Bret Easton Ellis mistakenly asks for cocaine on Twitter (DJ) Bret Easton Ellis, famed author of "American Psycho," tweeted a request for cocaine Sunday morning, leaving many to speculate that it was supposed to be a private message...“Come over at do bring coke now,” he tweeted at 3:44AM, stranding his 360,000 followers in a state of bewilderment regarding what the cryptic tweet could possibly mean.

Opening Bell: 01.06.16

North Korea RSVPs yes to World Economic Forum; Sanders tells Wall Street, Clinton to f*ck off; Hoodie with inflatable pillow funded on Kickstarter; and more.