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.
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Kraft-Heinz Deal Shows Brazilian Buyout Firm’s Cost-Cutting Recipe (WSJ)
At Kraft, as it has elsewhere, 3G plans to implement something called zero-based budgeting, an austerity measure that requires managers to justify spending plans from scratch every year. The technique has triggered sweeping cost cuts at 3G-related companies including Heinz—from eliminating hundreds of management jobs to jettisoning corporate jets and requiring employees to get permission to make color photocopies.

Kraft a Menu at the Buffett Buffet With Warren’s Latest Deal (Bloomberg)
His latest deal, the merger of Kraft Foods Group Inc. and H.J. Heinz Co., adds some intriguing possibilities to a day spent eating an all-Berkshire diet...LUNCH: Head out of the office. Sitting all day is bad for you, after all. Burger King’s brand-new Canadian tax domicile aside, Chicken Fries are back on the menu at the fast-food chain. Add a classic Whopper, or maybe an Oreo shake, or a Dairy Queen Blizzard might be another option. To drink? Coke. Always Coke. Stuck at work? Grab a Lunchables. Calories: About 1,510.

3G Capital, Warren Buffett’s Favorite Partner in Deals Worth Billions (Dealbook)
Warren E. Buffett has made a habit of criticizing ruthless Wall Street bankers and rapacious private equity firms over the years. As recently as last month, he railed against both in his annual letter to his shareholders at Berkshire Hathaway. Yet for Mr. Buffett, a genteel billionaire who has managed to put a friendly face on big business, one private equity firm stands apart from the rest. 3G Capital, the Brazilian private equity firm co-founded by the billionaire financier Jorge Paulo Lemann, has in recent years emerged as Mr. Buffett’s preferred business partner in striking multibillion-dollar deals. On Wednesday, 3G and Berkshire Hathaway teamed up to orchestrate a merger between Kraft, the big processed food maker, and Heinz, which the two companies own. Combining the companies will create a global food and beverage behemoth worth nearly $100 billion.

Dov Charney in S.E.C. Investigation, American Apparel Says (NYT)
American Apparel learned last month that the S.E.C. had begun an investigation “with respect to matters arising from” the internal review into Mr. Charney’s conduct, according to its filing. The retailer said it “intends to cooperate fully” with the S.E.C. investigation. A person briefed on the status of the investigation but not authorized to speak publicly said the matters related to Mr. Charney’s handling of company finances. The board shared its findings with the S.E.C., that person said.

I Drank So Much Soda as a Child That My Veins Collapsed (HuffingtonPost)
"When I say I drank a lot of Mountain Dew, I really mean it was the only thing I drank. For several months of my childhood, I had unlimited access to the neon-green sugar bomb, and I took a swig whenever I was thirsty. After I blacked out, I couldn't remember the last time I'd had a drink of water. It had been months."

Greek hopes to tap €1.2bn from EU fund dashed (FT)
Athens’ hope that it could alleviate a mounting cash crisis by seeking the return of €1.2bn in disputed funds from its bank rescue were dashed when the government was informed it had no legal claim on the money.

Major Central Banks Agree on Guidelines for Forex Market (WSJ)
Representatives from the foreign-exchange committees of the Federal Reserve Bank of New York, the Bank of Japan and the Bank of England among others have signed off on an eight-page document that explicitly bans traders from sharing client identities and information and disclosing data that could allow someone to deduce that information.

Buyout Firms Feel Pinch From Lending Crackdown (WSJ)
After resisting at first, banks have lately been falling in line with guidance regulators set in 2013, which sought to limit how much debt banks could extend for corporate takeovers. The shift is now stinging private-equity firms, whose bread-and-butter business is debt-laden buyouts.

$43K buys a private jet to college visits (CNBC)
Magellan Jets will offer 10-hour flight cards for college-bound students starting at $43,500, the company said on Wednesday. The package—which is sold from March 25 to June 30—is designed to reduce the complications that come with scheduling multiple visits to potential schools.

Farrah Abraham reveals plans to become a plastic surgeon (UPI)
Abraham, 23, is best known for her role in the MTV reality series Teen Mom and for her controversial adult film Farrah Superstar: Backdoor Teen Mom. Her experiences promoting the film and its sequel in the porn industry led Abraham to pen an erotic novel, her second book, which she plans to turn into a series. "I've taken a break after finishing the trilogy that I finished and I don't know if I'll do literary soon," she told E! News. "But then there's other novelty toys that I'm producing, and who knows, there's other stuff always." "Hopefully in five years I can go back to school," she added. "I really want to get my doctorate and I want to do plastic surgery. So that's just something on top of all of the other things I want to do, but that would probably be my end goal."

Related

Opening Bell: 2.26.15

Standard General likes RadioShack; Warren Buffett likes Coke; SEC sticks up for whistleblowers; You could rent this Hungarian village (population: 26) for $780/day; AND MORE.

Opening Bell: 02.20.13

Regulator set to weigh lifetime futures-trading ban for Corzine (NYP) Two directors of the National Futures Association will move tomorrow to ban Corzine from the multibillion-dollar futures trading industry in light of the scandalous collapse of MF Global — the commodity futures brokerage firm Corzine once headed. If the motion is approved, NFA would hold hearings to determine whether Corzine, MF’s former CEO, deserves a “lifetime ban” from the industry...Corzine, who declined to comment on the proposed ban, is reportedly looking to set up a hedge fund. An NFA ban would limit his ability to trade futures in any fund with outside investors, experts said. It could also hinder his ability to raise money from pension funds and other large investors, experts said. Corzine could also be asked to fork over as much as $250,000 for each violation, according to NFA rules. The proposed ban cites nine rule violations, which could ding the disgraced Corzine for as much as $2.5 million. Rhetoric Turns Harsh As Budget Cuts Loom (WSJ) With less than two weeks to go before the latest fiscal face-off, rhetoric heated up Tuesday as the political parties exchanged fire over whom to blame if looming spending cuts take effect. With Congress in recess this week, Republican and Democratic leaders sent lawmakers home armed with fact sheets about the $85 billion in across-the-board federal spending cuts due to start March 1, and talking points on how to blame the other side. Meantime, the White House and lawmakers are making no progress toward forging a compromise to avoid the reductions, which are known in Washington as the sequester. Thousands of Greeks Rally in Anti-Austerity Strike (Reuters) Tens of thousands of Greeks took to the streets of Athens on Wednesday during a nationwide strike against wage cuts and high taxes that kept ferries stuck in ports, schools shut and hospitals with only emergency staff. Beating drums and chanting "Robbers, robbers!" more than 60,000 people marched to parliament in the biggest anti-austerity protest so far this year. The two biggest labour unions brought much of crisis-hit Greece to a standstill during the 24-hour protest against policies which they say deepen the hardship of people struggling through the country's worst peacetime downturn. Judge Says Einhorn Hedge Fund May Succeed in Apple Case (Reuters) David Einhorn's hedge fund has shown a "likelihood of success" if his legal attack against Apple goes forward, a U.S. judge said, though he made no immediate ruling on fund's request to block a shareholder vote on a proxy proposal next week. U.S. District Judge Richard Sullivan on Tuesday reserved decision on a lawsuit by the fund, Greenlight Capital, to stop a Feb. 27 shareholder vote on an Apple proposal to end the issuance of preferred stock without investor approval. "Candidly I do think the likelihood of success is in favor for Greenlight," Sullivan said at a court hearing in New York. Big Anglo-French Buyout Planned (FT) A British-based private equity consortium is preparing a bid of 3.5 billion euros for French catering company Elior in what would be the biggest buyout in continental Europe since Lehman Brothers collapsed in 2008. CVC Capital Partners and BC Partners have teamed up to launch a buyout of Elior, underlining how confidence is returning to Europe's private equity sector. New York mom charged with child endangerment after hiring strippers to perform lap dances at her 16-year-old son's birthday party (NYDN) Judy Viger, 33, hired the women from a company called Tops in Bottoms and arranged for them to perform in a private room at the Spare Time Bowling Center in South Glens Falls on Nov. 3. At the party, the women performed what police describe as “personal and intimate” dances with the party guests, some of whom were as young as 13. Approximately 80 people attended the party, including a 13-year-old and many adults who later said they were outraged at the sexually charged performances. Police were alerted to the party activities after raunchy photos of the lap dances were posted online. The mother of a 15-year-old boy who attended the party saw some of the photos on her son’s Facebook page and alerted South Glens Falls authorities...The company providing the strippers said that the dancers were unaware that the kids at the party were underage, local CBS affiliate WRGB reported, and that the incident was being “blown out of proportion.” Heinz Deal Feeds Chatter About Food-Industry Consolidation (WSJ) The deal sparked speculation of what Heinz may want to buy and what other food company has the wherewithal to become a consolidator. With the potential for more tie-ups, that may also jar loose some brands or businesses—possibly Heinz's underperforming frozen-foods business—that could make a nice fit in another company's pantry. The speculation makes just about everyone a buyer or a seller. "Most of what food companies discuss at the conference will now be taken in the context of what it may mean for further industry consolidation or portfolio change," Barclays packaged-food analyst Andrew Lazar said. Brink’s Says Brussels Diamond Robbery Will Hurt Quarter’s Profit (Bloomberg) Brink’s Co., a provider of armored cars to transport valuables, said a diamond robbery at Brussels airport will have a “significant impact” on first-quarter earnings. A portion of the gems stolen two days ago was being shipped by Brink’s, the Richmond, Virgina-based company said today in a statement. The Antwerp World Diamond Centre has said about $50 million of rough and polished diamonds were stolen as the gems were being loaded onto a plane bound for Switzerland. Revel Into Chapter 11 (AP) Revel, the casino many people had hoped would turn around Atlantic City’s sagging fortunes, said yesterday that it will file for Chapter 11 bankruptcy protection in March, less than a year after it opened. The voluntary, prepackaged bankruptcy envisioned for late March will wipe away about two-thirds of its $1.5 billion in debt by converting more than $1 billion of it into equity for lenders. JPMorgan Leads U.S. Banks Lending Least Deposits in 5 Years (Bloomberg) The biggest U.S. banks including JPMorgan Chase & Co. and Citigroup Inc. are lending the smallest portion of their deposits in five years as cash floods in from savers and a slow economy damps demand from borrowers. The average loan-to-deposit ratio for the top eight commercial banks fell to 84 percent in the fourth quarter from 87 percent a year earlier and 101 percent in 2007, according to data compiled by Credit Suisse Group AG. Lending as a proportion of deposits dropped at five of the banks and was unchanged at two, the data show. New Grey Poupon 'Pardon Me' ad to air during Oscars (AP) After a 16-year hiatus, the mustard that mocked its own stuffy image in one of TV’s most famous commercials will once again take to the airwaves during the Feb. 24 Academy Awards show. The spot comes as Kraft Foods looks to boost sagging sales of the Dijon mustard, which is facing competition from a growing variety of high-end condiments on supermarket shelves. The new ad begins in the same way as the original — an aristocratic English gentleman is being chauffeured in the countryside, when another car pulls up alongside them at a stop. The back window rolls down and a second man asks in an over-the-top snooty accent, “Pardon me, would you have any Grey Poupon?”

paul singer

Opening Bell: 8.21.17

Paul Singer upstages Warren Buffett; Goldman looking for commodities traders who can actually make money; Carl Icahn's DC misadventures; seriously, don't look at your phone while driving; and more.

Opening Bell: 03.04.13

Euro-Zone Deal Faces Hurdles (WSJ) Germany's reluctance to put its taxpayers' money at risk in other countries' banks is proving the biggest obstacle to letting the euro zone's bailout fund, the European Stability Mechanism, invest directly in banks that need more capital. In Ireland, Spain, Greece and Cyprus, bailouts of struggling banks are placing heavy burdens on the state, adding to fast-rising national debts. Buffett Disappointed With Berkshire's 'Subpar' $24 Billion Gain (CNBC) Warren Buffett called 2012 "subpar" in his annual letter to shareholders as Berkshire Hathaway's per-share book value rose 14.4 percent, less than the S&P 500's 16-percent increase. It's the ninth time in 48 years this has happened. Buffett notes that the S&P has outpaced Berkshire over the past four years and if the market continues to gain this year the benchmark stock index could have its first five-year win ever. "When the partnership I ran took control of Berkshire in 1965, I could never have dreamed that a year in which we had a gain of $24.1 billion would be subpar ... But subpar it was." Buffett: Berkshire on hunt for more Heinz-like deals (Reuters) "If we get a chance to buy another Heinz, we will do that," Buffett said on CNBC. Berkshire likes the ketchup maker's business, the price of the $23 billion deal, and its partner in the transaction, private equity firm 3G Capital, Buffett said in an extended interview. HSBC Reports Declining Profit and Says Costs Are Increasing (Bloomberg) Pretax profit for 2012 dropped 5.6 percent to $20.65 billion, trailing the $23.49 billion estimate of 26 analysts surveyed by Bloomberg. Revenue fell 5.4 percent to $68.33 billion from $72.28 billion, HSBC said today in a statement. Chief Executive Officer Stuart Gulliver is being thwarted in his plan to reduce costs to 48 percent to 52 percent of revenue as the London-based lender set aside $1.9 billion to settle U.S. money-laundering probes and boosted spending on compliance by $500 million. Expenses as a proportion of revenue climbed to 62.8 percent from 57.5 percent, and wage inflation in markets such as Latin America is increasing, HSBC said today. Swiss Back Executive-Pay Controls (WSJ) The plan, dubbed the "rip off" initiative by the country's media, bans so-called golden-handshake and golden-parachute severance agreements. It also requires greater transparency on loans and retirement packages for senior executives and directors. Beauty queen took my heart, then she took me for $96,000 ride: hedge-funder's suit (NYP) Rishi Bajaj, 33, says he opened his heart, then his wallet, to Miss New Mexico Teen USA 2007 Liz Kranz after she told him she was considering selling her eggs to raise cash for a relative in rehab. The sob story got the beauty a $20,000 loan from Bajaj, he claims in a Manhattan Supreme Court lawsuit. Bajaj, who co-manages the $620 million hedge fund Altai Capital, then told Kranz, 24, to pick out a car for the couple to share — and was “surprised” when she selected a 2012 BMW that came with a $17,070 down payment. They met in July 2012 and dated for “several months,” even vacationing together in Italy, where, Bajaj said in court papers, he let Kranz use his American Express card. Kranz, of the Lower East Side, was also allowed to use Bajaj’s AmEx to buy a dress for a wedding they attended. Bajaj and Kranz, who lived briefly in LA, eventually broke up. There were “disagreements about their remaining obligations to each other,” Bajaj said in court papers. He claims the pageant queen kept her hands on his credit card and racked up tens of thousands in charges...In all, Bajaj claims Kranz spent $58,860 on his credit card over three months last year. In a November letter, his lawyer accused her of “theft, fraud and other egregious misconduct” and demanded she repay the full $58,860 in credit-card purchases. NYC to be hit hard by sequester: Merrill Lynch economist (NYP) Two months’ worth of job gains are about to vanish nationwide, warns a Merrill Lynch economist — and New York City, whose unemployment rate is already at an eye-popping 8.8 percent, will be hit exceptionally hard in this employment carnage as Washington begins to enact a series of controversial spending cuts known as the sequester. “It will set the economy back a few months in the job market,” Ethan Harris, co-head of global economics research at Bank of America Merrill Lynch, told The Post. “The national job market recovery has been modest, and it has been weaker locally in New York.” Nationally, Harris calculated a loss of about 300,000 jobs, roughly two months of average job gains, if the sequester is enacted untouched. Job-Hunt Time Shrinks in U.S. From Record High (Bloomberg) For 13 million out-of-work Americans, record spells of joblessness are abating. The median duration fell to 16 weeks in January from 25 weeks in June 2010, Labor Department data show. Fewer people compete for each opening as hiring expands, and persistent long-term unemployment is starting to mend. The progress supports Federal Reserve Chairman Ben S. Bernanke’s view that America’s labor market remains flexible and isn’t succumbing to hysteresis, or permanently higher joblessness, similar to Europe in the 1980s, said Dale Mortensen, a professor of economics at Northwestern University in Evanston, Illinois, and 2010 Nobel laureate. That suggests continued monetary stimulus can bring about a faster healing. Slim Risks Losing World’s Richest Person Title as Troubles Mount (Bloomberg) Slim’s lead over the next-wealthiest man, Bill Gates, narrowed last week to about $4.8 billion -- the closest spread in almost a year. The Lebanese immigrant’s son, who acquired Mexico’s phone monopoly and turned it into a pan-Latin American powerhouse, lost almost a 10th of his net worth last month, winnowing his fortune to $71 billion, according to the Bloomberg Billionaires Index. Dennis Rodman: Kim Jong Un Wants President Obama to ‘Call Him’ (ABC) In his first interview since returning to the U.S. from an unprecedented visit to North Korea last week, former NBA star Dennis Rodman said he bears a message for President Obama from the country’s oppressive leader, Kim Jong Un. “He wants Obama to do one thing: Call him,” Rodman told ABC’s George Stephanopoulos on “This Week.” “He said, ‘If you can, Dennis – I don’t want [to] do war. I don’t want to do war.’ He said that to me.” The athlete also offered Kim some diplomatic advice for potential future talks with President Obama. “[Kim] loves basketball. And I said the same thing, I said, ‘Obama loves basketball.’ Let’s start there,” Rodman said.

Opening Bell: 11.06.12

Europe, Central Bank Spar Over Athens Aid (WSJ) Greece faces a key Treasury-bill repayment in less than two weeks, and the money isn't there unless governments provide additional aid or the ECB agrees to lend Greek banks the money to roll over the debt. It is a particularly sensitive issue for the ECB, which is trying to create a credible financial backstop to hold the euro together while governments overhaul their economies and finances. But with each step the ECB takes to help Greece and others, it inches ever closer to rules that prevent it from printing money to help governments out of their debt problems. The bank is already facing accusations in Germany that it is straying from its primary mandate to keep inflation low. Iceland Sees Mortgage Bubble Threat From Foreign Cash (Bloomberg) Iceland’s lawmakers are searching for ways to keep their economy from lurching into another asset bubble as offshore investors forced to keep their money in the country channel it into the housing market. Apartment prices have soared 17 percent since April 2010 and are now just 1.7 percent below the pre-crisis peak in March 2008, Statistics Iceland estimates. The boom stems from currency restrictions imposed in 2008 to prevent the collapse of the Krona after the country’s biggest banks defaulted on $85 billion of debt. While those controls helped cauterize a capital exodus and propel a recovery, it left about $8 billion in offshore kronur that can only flow into Icelandic assets, inflating demand for housing and mortgage bonds. The government is now seeking to correct the imbalances, which risk plunging the island into yet another boom-bust cycle just four years after the banking industry dragged the economy through its worst recession since World War II. FBI Probes Rochdale Securities (NYP) The Stamford, Conn., broker dealer is teetering on the brink of extinction, the result of an unauthorized $1 billion purchase of Apple shares on Oct. 25, sources said. The trade of 1.6 million Apple shares was made — instead of a client’s order of one-tenth that amount, or 160,000 shares — to perpetuate the alleged stock manipulation scam, people familiar with the matter said...The alleged stock manipulation scam was being worked with at least one other unidentified trader not affiliated with Rochdale, sources said. Multiple sources said the alleged scam had already pocketed the traders roughly $20 million, sources said. Drop In Financial Deals Spurs One (WSJ) New York investment bank KBW made it through the Sept. 11, 2001, terrorist attacks, but it couldn't outlast a drought in financial-services deal making. KBW, which struggled in recent years at the hands of a sharp slowdown in its core business—financial-industry merger advice—agreed be acquired by larger rival Stifel Financial for $575 million. Berkshire Cash Nears Record as Buffett Extends Deal Hunt (Bloomberg) Cash surged 17 percent to $47.8 billion in the three months ended Sept. 30, Omaha, Nebraska-based Berkshire said in its quarterly regulatory filing Nov. 2. That’s $115 million less than the record at the end of June 2011. “He’s elephant hunting,” said Jeff Matthews, author of “Secrets in Plain Sight: Business & Investing Secrets of Warren Buffett” and a Berkshire shareholder. “And there aren’t a lot of elephants around.” Did Wall Street Just Give Up On Romney? (NetNet) John Carney says yes: "On the eve of the election, many financial professionals on Wall Street believe that Mitt Romney has lost the election. In phone conversations, email and instant messaging exchanges, and text messages with over 20 people in different jobs on Wall Street today the message I picked up was almost universal: The president will be re-elected." Christie: Hug From Springsteen Made Me Weep (WaPo) New Jersey Gov. Chris Christie told reporters Monday that he had an unexpected — and moving — conversation earlier with his hero, Bruce Springsteen. He also got a hug from the rock legend on Friday, at a benefit concert for victims of Superstorm Sandy. He later cried, calling the moment a highlight in a tough week. “Bruce and I had an opportunity to chat for a while Friday night… we hugged and he told me, ‘it’s official, we’re friends,” Christie said at a news briefing. President Obama was on the phone with the Republican governor Monday, discussing storm damage, when he briefly handed the line over to Springsteen. The rock legend is traveling on Air Force One as he campaigns for the president. Before the storm Springsteen refused to acknowledge Christie, whose budget cuts he has criticized. But in the wake of the disaster, which hit the Jersey Shore particularly hard, he has started to embrace his ardent fan. HSBC Dirty Laundry Costs (Bloomberg) HSBC Holdings said it’s likely to face criminal charges from US anti-money-laundering probes, and the cost of a settlement may “significantly” exceed the $1.5 billion the bank has set aside. The lender has made an additional $800 million provision to cover a potential settlement, adding to the $700 million it had earmarked. A Senate committee said in July that failures in HSBC money-laundering controls allowed terrorists and drug cartels access to the US financial system. Bharara insider streak on line (NYP) With a 6-0 record in trial convictions against defendants caught in his insider-trading probe, Wall Street’s top cop Wednesday will kick off his final trial emanating from that investigation. Already the insider-trading probe has resulted in 68 convictions — including guilty pleas, the biggest Wall Street crackdown since the 1980s. Squaring off against Bharara in Manhattan federal court are two well-heeled hedge-fund defendants: Anthony Chiasson, founder of the $4 billion hedge fund Level Global, and Todd Newman, a former money manager with Diamondback Global. The beginning of jury selection was delayed more than a week because of Hurricane Sandy. Chiasson and Newman stand accused of reaping more than $60 million in profits from trading confidential tips about computer maker Dell and graphics firm Nvidia. 13 People Trying To Trade Gas For Sex On Craiglist (BuzzFeed) It was probably inevitable that the gas shortages in New York and New Jersey would lead to ads like "I've got gas from Hess and looking for any sexy woman who may not want to wait in those long lines for hours and hours only to find the station empty when it's their turn. So let me know, I'm sure we could work something out to get your tank filled and empty mine. Call or text."

Opening Bell: 5.2.16

Warren Buffett trashes Valeant, hedge fund fees; Marissa Mayer gets $55 million if ousted; Now You Can Get Pizza In A Pizza Box Made Out Of Pizza; and more.

Opening Bell: 9.28.15

Market has trust issues with Fed; Dudley sees hike in 2015; "Wall Street banks are tracking everything employees do"; Why Warren Buffett was suited up for the Dolphins game; "Man Tries To Kill Spider With Lighter, Starts Gas Station Blaze"; and more.

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.