Opening Bell: 12.17.14

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Plunging Ruble Unsettles Russians, Poses Test for Putin (WSJ)
As Russian President Vladimir Putin has ratcheted up the conflict with the West for most of the year, the economic fallout on ordinary Russians has been limited. Suddenly, though, the plunging ruble is reawakening fears of rising prices and the kind of financial crisis Mr. Putin has sought to put behind his country. As the ruble hit a record low, falling as much as 20% against the dollar Tuesday, Moscow residents rushed to buy electronics and other big-ticket items and drained rubles from ATMs to swap them for dollars and euros—signaling a new feeling of vulnerability among Russians and a fresh challenge to their leader. From St. Petersburg to Siberia, money changers ran out of foreign currency and were raising exchange rates. Sberbank , Russia’s state savings bank, and Alfa Bank, Russia’s largest private lender, said they were experiencing a rush for dollars and euros.

A Pimco Emerging-Market Fund Hit by Russian-Debt Bet (WSJ)
The $3.3 billion Pimco Emerging Markets Bond Fund has lost 9% this month, according to Morningstar Inc., fueled by the decline in oil prices and the gathering effect on Russian economic output of U.S. sanctions.

American Apparel Executives Call for Charney’s Return (Bloomberg)
Paula Schneider, American Apparel Inc. (APP)’s incoming chief executive officer, hasn’t even started work yet and she’s already facing a group of disgruntled managers. More than 30 executives asked the board to reconsider their decision to fire former CEO and company founder Dov Charney, according to a letter obtained by Bloomberg News. Charney should be a part of the retailer’s future by helping the next CEO improve the chain because he is what “makes this thing tick,” the managers said. Charney’s loyalists bring an additional headache to a new CEO already coping with red ink and sluggish sales. The chain has racked up more than $300 million in net losses since 2010, forcing it to raise capital to make ends meet -- most recently in July. Schneider also has to contend with image problems at a company that’s been criticized for its racy advertising and sexually charged culture.

Billionaires who made and lost the most in 2014 (CNBC)
In a volatile year for the world's rich, Jack Ma saw his fortune surge to $29.2 billion from just over $10 billion, according to Wealth-X. That 175 percent increase made him the biggest financial gainer of the year for billionaires, Wealth-X said. Warren Buffett came in second place, with a gain of $13.5 billion in 2014, a 23 percent increase from last year, to push his fortune to US$72.6 billion. Bill Gates saw his net worth grow by US$10.5 billion in 2014 to reach US$83.1 billion. The biggest loser, according to Wealth-X, was Russian energy tycoon Leonid Mikhelson, whose fortune shrank to $10 billion from $17 billion.

"I spend 11,000 a year on takeout" (NYP)
A few months ago, Kris Ruby lost her credit card and briefly had to borrow her dad’s while waiting for the replacement. When her dad saw the bill, it wasn’t clothes, cabs or nightclub charges that gave him a fright — it was sushi. “Dad was like, ‘What are all these charges for Seamless?’ ” Ruby, 27, recalls. She used his card for just one week, but in that amount of time she racked up about $225 worth of sushi, superfood salads and other takeout to her Wall Street home. He promptly banned her from using his card on any future delivery purchases. “I felt like it was my guilty little pleasure and secret,” Ruby says. “I couldn’t wait to put my own card back on it so no one could see my meals.” Ordering through Seamless’ handy delivery app almost every night chomps $900 a month off Ruby’s salary as president of her own p.r. and social media agency — almost $11,000 a year, enough for 98 unlimited MetroCards or 4,720 pizza slices. “Oh, my God, this is shocking,” she says, when realizing just how much she spends. “Sometimes I look at this and I’m like, ‘I need to stop this with Seamless.’ ”

Market Turmoil Will Test the Post-Crisis Financial System (Dealbook)
The parallels with 1998 have led investors and regulators to ask if any similarly dangerous weak points exist today. And if they do, the question is whether the big banks are sturdy enough to bear the shocks. For the moment, many specialists say the system is sufficiently girded. “This doesn’t threaten the banks and other financial institutions because they are considerably stronger than they were a few years ago,” said Donald Kohn, a senior fellow at the Brookings Institution and a governor of the Federal Reserve during the 2008 financial crisis. The banks are stronger today because they rely less on borrowed money to finance their trading and lending. And the Wall Street banks are not lending as much money to hedge funds and other investors to make highly speculative bets that could be vulnerable right now. Also, the current problems overseas are largely in countries where American banks have limited activities. This puts global banks in a significantly better position than in 2011 and 2012, when the existence of the euro was threatened and investors were fleeing from Europe’s banks.

Silicon Valley Trails Big U.S. Companies in Women CEOs and Directors (Digits)
Silicon Valley tech firms have about half as many female directors and about two-thirds the number of female executive officers as America’s largest companies, according to a new study.

Low-Yield Bond World Everyone Loved to Hate Is Ending in Tears (Bloomberg)
Remember when everyone in the bond market bemoaned living in a low-volatility, low-yield world? Those days are ending. Prices are swinging more than they have on average during the past few years and there’s yield to be had if you have the stomach for risk. Junk bonds and emerging-market debt have been tumbling on concern that plummeting oil prices will impede the ability of borrowers to repay their debt. Yet many don’t seem much happier for it.

Cerberus makes £2.3bn real estate bet (FT)
Cerberus has acquired two portfolios of distressed property loans for £2.3bn as the US private equity group bets on a strengthened recovery in regional values in the UK and Irish commercial property markets. Already one of the biggest buyers of distressed real estate from banks seeking to de-risk their loan books, Cerberus agreed on Tuesday to acquire a £1.2bn portfolio of commercial property loans from National Australia Bank, and a further £1.1bn portfolio of Irish commercial real estate loans from the Royal Bank of Scotland.

Memo to Staff: Time to Lose a Few Pounds (WSJ)
The boss thinks you could stand to lose a few. Seeking to make a dent in the intractable problem of obesity—a condition affecting roughly one-third of U.S. adults and costing companies more than $73 billion a year, according to researchers from Duke University—businesses are experimenting with new measures to encourage workers to slim down. They are moving beyond healthy snacks in vending machines or discounted gym memberships and taking an aggressive, personalized approach to workers’ weight.

Wife leaves cheating husband and twin naked in busy car park (MetroUK)
Ting Su, 29, caught her husband and twin cheating on her and tracked them down to a shopping centre using a mobile phone tracker. She went to find husband Cheng, 30, who was completely naked in a car along with her sister. They both jumped out of the car with not a thread of clothing. But Ting saw her opportunity, jumped into the car and drove off, leaving the embarrassed pair where they stood. Witness You Meng, 33, said: ‘It was so funny. Loads of people were grabbing their phones and I did as well. He was banging his fist on the window and shouting at her, and she just wasn’t playing ball. Ting has filed for divorce and revealed that Cheng and her sister had been having an affair since she gave birth to twins.

Related

Opening Bell: 05.31.12

At Core Of Greek Chaos, A Reviled Tax (WSJ) So despised is the property tax that its critics—which is to say, most of Greece—refer to it as the haratsi, after a per capita tax imposed by the occupying Ottomans. About three-quarters of Greece's households own their homes. Like many other European countries, Greece already has some property taxes. But those have been aimed mostly at higher-value properties and raised little revenue. JPMorgan To Spin Out 'Special Investments' (FT) The unit, whose investments include LightSquared, the wireless internet provider, will be moved to the bank’s corporate division and prevented from seeking fresh investment opportunities, bankers were told on Wednesday. Woman Who Wouldn't Be Intimidated By Citigroup Wins $31 Million (Bloomberg Markets) Sherry Hunt never expected to be a senior manager at a Wall Street bank. She was a country girl, raised in rural Michigan by a dad who taught her to fish and a mom who showed her how to find wild mushrooms. She listened to Marty Robbins and Buck Owens on the radio and came to believe that God has a bigger plan, that everything happens for a reason. She got married at 16 and didn’t go to college. After she had her first child at 17, she needed a job. A friend helped her find one in 1975, processing home loans at a small bank in Alaska. Sherry Hunt never expected to be a senior manager at a Wall Street bank. She was a country girl, raised in rural Michigan by a dad who taught her to fish and a mom who showed her how to find wild mushrooms. She listened to Marty Robbins and Buck Owens on the radio and came to believe that God has a bigger plan, that everything happens for a reason. She got married at 16 and didn’t go to college. After she had her first child at 17, she needed a job. A friend helped her find one in 1975, processing home loans at a small bank in Alaska...In March 2011, more than two years after Citigroup took $45 billion in bailouts from the U.S. government and billions more from the Federal Reserve -- more in total than any other U.S. bank -- Jeffery Polkinghorne, an O’Fallon executive in charge of loan quality, asked Hunt and a colleague to stay in a conference room after a meeting. The encounter with Polkinghorne was brief and tense, Hunt says. The number of loans classified as defective would have to fall, he told them, or it would be “your asses on the line.” Hunt says it was clear what Polkinghorne was asking -- and she wanted no part of it. Jobless Claims Increased Last Week (Bloomberg) First-time claims for jobless benefits increased by 10,000 to 383,000 in the week ended May 26 from a revised 373,000 the prior week, the Labor Department said today. The initial claims exceeded the median estimate of 370,000 in a Bloomberg News survey of economists. The number of people on unemployment benefit rolls dropped. For French CEO's, Politics Means Big Pay Cuts (WSJ) Top managers at France's state-owned companies are expected to face significant pay cuts next month, when Socialist President François Hollande plans to begin enforcing salary caps as part of his broader electoral pledge to get tough on the rich. During the presidential campaign, Mr. Hollande vowed to curb "excessive" remunerations at France's 52 state-controlled or partially state-owned companies by ordering that executive pay not exceed 20 times the salary of the lowest-ranking employees. New York Plans to Ban Sale of Big Sizes of Sugary Drinks (NYT) The proposed ban would affect virtually the entire menu of popular sugary drinks found in delis, fast-food franchises and even sports arenas, from energy drinks to pre-sweetened iced teas. The sale of any cup or bottle of sweetened drink larger than 16 fluid ounces — about the size of a medium coffee, and smaller than a common soda bottle — would be prohibited under the first-in-the-nation plan, which could take effect as soon as next March. Gorman, Greifeld ‘Face’ off (NYP) Morgan Stanley is prepared to take Nasdaq to court to recoup money it believes it lost in the flubbed Facebook initial public offering. CEO James Gorman’s investment bank, which led the now-notorious, snafu-ridden Facebook IPO, believes Bob Greifeld’s Nasdaq owes it roughly $10 million, sources said. The investment bank, which quarterbacked the $16 billion Facebook offering, had to shell out to clients a seven-figure sum to resolve a litany of Nasdaq trading glitches. Morgan Stanley's Facebook Analyst: Sober Man in World of Hype (Reuters) Scott Devitt was one of a number of analysts to lower his revenue and earnings expectations for the social media giant after the company informed analysts that it was dropping its quarterly and annual revenue guidance. Facebook also issued an amended prospectus cautioning that the shift of its users to mobile platforms could have a negative impact on revenue growth. Such a move was highly unusual because it occurred just days before Facebook's highly anticipated IPO, whose lead underwriter was Morgan Stanley, Devitt's employer. The investment bank not only had control over the process, but over 38 percent of Facebook shares being sold. Devitt's and other analysts' revised revenue forecasts were shared via phone calls with institutional investors, but not with retail investors, before the stock began trading publicly. That in turn raised questions over whether the playing field was skewed against Main Street investors from the start and sparked lawsuits. Citigroup Debt Viewed As Risky (WSJ) Gimme Credit, a fixed-income research company based in New York, said it expects debt issued by the third-biggest U.S. bank by assets to perform less well over the next six months than bonds issued by the company's peers. Russian Zuckerberg Throws Money Paper Planes At Passersby (MSN) Russian millionaire Pavel Durov reportedly spent last weekend flying paper airplanes made from 5,000-ruble notes (equal to about $160) out the window of his office in St. Petersburg. The 27-year-old gave away around $2,000 before he stopped because "people turned into animals" grabbing the cash. Durov is the CEO of Russia's largest social network Vkontakte, which sort of makes him the Russki Mark Zuckerberg. Scarf-Wearing Pig Stuns Motorists (UPI) Pennsylvania State Police said a baby pig wearing a scarf crossed rush hour traffic in Pittsburgh and disappeared into the woods. Police said the fashionable swine was spotted crossing the inbound lanes of Parkway West near the Green Tree exit around 8:30 a.m. Wednesday, and many motorists pulled off the parkway and stopped to take pictures of the unusual pedestrian. Troopers said the pig had crossed over a guardrail and into the woods by the time they arrived, and they were unable to locate the animal.

Opening Bell: 3.26.15

3G, the company orchestrating the Kraft/Heinz merger with Warren Buffett, makes employees "get permission to make color photocopies"; Greece is still screwed; Dov Charney is being investigated by the SEC; "I Drank So Much Soda as a Child That My Veins Collapsed"; and more.