Meredith Whitney’s Fund Sued by Billionaire Platt’s BlueCrest (Bloomberg)
Meredith Whitney’s hedge fund is being sued by its biggest investor, a fund connected to billionaire Michael Platt’s BlueCrest Capital Management, as demands to recoup money spill into court, according to people with knowledge of the dispute. Platt’s BlueCrest Capital Opportunities brought the lawsuit in Bermuda last week, seeking to get back its $46 million stake in Whitney’s American Revival Fund, the people said, asking for anonymity because the case isn’t public. Her hedge fund slid 11 percent this year through November despite a rising stock market. The suit shows how quickly relations have soured since last year, when Platt helped Whitney, once one of Wall Street’s most famous analysts, start her new firm, Kenbelle Capital. The BlueCrest fund invested $50 million that November, then asked to redeem this October, expecting payment around the end of last month, the people said.
U.S. Economy Posts Strongest Growth in More Than a Decade (WSJ)
The U.S. economy is rounding out 2014 in a sweet spot of robust growth, sustained hiring and falling unemployment, stirring optimism that a postrecession breakout has arrived. A fuller picture of the year-end trends emerged Tuesday when the Commerce Department, in separate reports, said the U.S. economy expanded at a 5% seasonally adjusted annual rate in the third quarter, its strongest pace in 11 years, and reported that consumer spending accelerated last month amid rising incomes and falling gasoline prices.
Oil Bust Gets ‘I Will Survive’ Rewrite From Analyst (Bloomberg)
When historians tell the story of the Oil Bust of 2014, Wells Fargo & Co. analyst James Spicer will surely merit a footnote for his rewrite of Gloria Gaynor’s disco anthem “I Will Survive.” Instead of defying a faithless lover, Spicer’s version laments falling crude prices from the point of view of a shale driller. “At first I was afraid, I was petrified,” begins the song, which has been shared on Twitter. “When OPEC didn’t cut and oil prices began to slide/ But then I spent so many nights thinking how the Saudis did us wrong/ And I grew strong/ And I learned how to scrape along.”
Credit-Default Swaps Get Activist New Look (WSJ)
Hedge-fund managers are putting a new twist on credit-default swaps, using the contracts to fortify bets on troubled companies. The swaps, which work like insurance policies when companies default on bonds and loans, fell out of favor after Wall Street’s outsize bets on the swaps soured during the financial crisis. Now, investors are increasingly combining credit-default-swaps trades with elements of activist investing to push companies toward default in some cases and away in others. Swaps buyers pay sellers an upfront fee and a steady flow of premiums in exchange for a guaranteed payout from the seller if default occurs. Historically, the corporate credit-default-swaps market was dominated by bets on giant borrowers with billions of dollars of debt outstanding. But that use has declined, while swaps contracts on the debt of smaller companies in financial distress has surged.
Circus Accused Of Passing Off Dogs As Pandas
An Italian circus is facing possible criminal charges for allegedly trying to deceive the audience with two chow chows painted to resemble pandas. Police in the city of Brescia confiscated the white chow chows on Dec. 19 from the Orfei Circus and accused the staff of painting black patches on them in hopes the customers would believe the pups were actually pandas. "Two white furred dog cubs, a male and a female of chow chow breed, were camouflaged as pandas and shown to the public, particularly children, to take photos demanding payment," Italy's state forestry police said, according to the International Business Times.
UBS Raises Flag on China’s $1 Trillion Overseas Debt Pile (Bloomberg)
The world’s second-largest economy is exposed to shifts in currency and interest rates as never before because of expanding international trade and easing foreign-exchange regulations, said Stephen Andrews, head of Asia banks research in Hong Kong at UBS. Daiwa Capital Markets has a $1 trillion estimate for carry-trade inflows since 2008, bets on the difference between yields in China and overseas. It sees a 5.7 percent drop in the yuan next year.
F.B.I. Searches Doral Financial’s Offices in Puerto Rico (Dealbook)
Agents from the Federal Bureau of Investigation on Tuesday raided the offices of Doral Financial in San Juan, Puerto Rico, as part of an investigation involving the struggling bank...With its business in Puerto Rico struggling from high unemployment and sinking property values there, Doral has been counting on a roughly $230 million tax refund deal from the island’s government. But commonwealth officials said this year that the tax deal, negotiated by a previous administration, was invalid, setting off concern among banking regulators about Doral’s capital levels. In October, a local court ruled that the tax deal should stand. The government has appealed. Doral’s struggles reflect how a relentless recession in Puerto Rico is squeezing the island’s businesses, government and a banking system that some say has too many competing institutions.
New Jersey to bail out Atlantic City with short-term loan (Reuters)
Atlantic City, New Jersey's struggling gambling hub, will get a short-term, $40 million loan from the state rather than try to borrow the money in the capital markets this year, a city official said on Tuesday. Even the city's originally planned $40 million note sale, now squashed, was itself a scaled back version of a larger bond issuance that was delayed amid uncertainty over the city's next financial steps. The city must repay the loan by March 31 at a 0.75 percent interest rate, according to the loan agreement, signed on Dec. 18 by Mayor Don Guardian and the state.
Is Sage Kelly the new normal for Wall Street divorces? (NetNet)
Is a nasty split in scorching public view the new normal for Wall Street power couples? "Lawyers have figured out that they can use and manipulate the media," matrimonial attorney Sy Reisman said. "The Wall Street guys are targets, no question about it," added Reisman, citing the Kelly divorce as a prime example. "They have more money and they want to be private. … They don't want their personal lives in the press." Divorce lawyer Suzanne Bracker said going to the press on behalf of a client is more common. "Nowadays everyone is doing it and there is no more shame," Bracker said. "Whatever's good for your client is something that you're going to advocate." Jacqueline Newman, another divorce lawyer who works with financial industry clients, said the threat of going to the press has always existed but more are using the media as part of their battle tactics to force a settlement.
Man Sentenced For Selling Crack At Iowa Candy Store (AP)
Under the plea agreement, Howard acknowledged he repeatedly sold crack cocaine to an undercover officer in January and February 2014. The sales were at Howard's business, Wayne's Candy, in Dubuque. During the sales, Howard told the officer to take items from the shelf so the transaction looked legitimate.