Opening Bell: 3.30.15

Dow will merge with Olin; Jurors side with Kleiner; "DIY Bond Traders"; The origins of The Hoff; and more.
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How DIY Bond Traders Displaced Wall Street’s Hot Shot Bond Dealers (Bloomberg)
The bond dealers who defined Wall Street success in the ’80s -- and who were immortalized by Tom Wolfe in his best-selling novel -- seem to be losing power by the day. In their place are money managers like Mark Macqueen, who are assuming a larger role in the market for U.S. government debt as traditional dealers pull back. The development is not only shifting the balance of power in the world’s largest government bond market, but also making trading Treasuries more difficult for everyone. Macqueen used to be able to trade $40 million of Treasuries by calling one dealer. Now, he must spread out orders in small chunks across an array of electronic platforms and wait for a dealer to bite.

Juror in gender lawsuit sympathized with Pao, sided with Kleiner (Reuters)
Sympathetic to Pao in many areas, Malone, who designs technology allowing users to interact with apps and websites, said she herself felt she reached a "glass ceiling" when she worked at Yahoo Inc years ago...Ultimately, what Malone saw as an environment that was sometimes difficult for women was not enough to sway her on the merits of Pao's specific case against Kleiner. "The environment definitely is biased against women in technology, and venture capital is even worse," said Malone, but "I didn't find her as credible as she should have been."

Blackstone CEO Sees ‘Remarkable’ Opportunities in Slumping Oil (Bloomberg)
Most of the New York-based private equity firm’s energy investments aren’t in oil, meaning its exposure to lower oil prices is limited, Schwarzman said in an interview on the sidelines of the Boao Forum for Asia with Bloomberg Television on Saturday. Schwarzman, who is also chief executive officer of Blackstone, didn’t elaborate on specific energy investments.

In Silicon Valley, Auto Racing Becomes a Favorite Hobby for Tech Elites (Dealbook)
Over the last year or so, racing seems to have become the Valley’s “it” hobby. There are informal groups of drivers at Apple, Facebook and Google who get together to rent out local tracks. As a reporter who covers the industry, I’ve received three separate invitations from sources in the past few months. “By the way, are you into cars?” they’ll say. “Ever gone out on a track?”

David Hasselhoff: 'I Didn't Invent The Hoff' (Yahoo)
Q: Now are you really going to be cleaning people's homes [as part of your partnership with Clorox]? A: Yeah, I think that’s hysterical. I’ve done this before where I just knock on people's doors and they open the door and I go, "Hi! It's The Hoff! I’m here to help you clean. You want some help?" It's just really fun. I’ve been doing that basically all my life. I actually started when I was literally jogging in the Bahamas. A lady came out to get her mail and she said, "Oh, it's Knight Rider!" I said, "How are you? Got anything to drink in there? It's so hot here in the Bahamas." "Come on in, Knight Rider. Come on in!" Next thing I know, I’m in their house, her whole family comes home, the kids come home from school, it's just the loveliest family from the Bahamas and I ended up [going out that night] with the daughter to the blackest club ever. You know, I can get myself into any situation. Q: A lot of celebrities are doing the self-deprecating thing, but I feel like you were one of the first people who was willing to joke about yourself. A: I didn’t invent The Hoff, The Hoff was invented by some secretaries in Australia and then they made all these jokes about, you know, Hasselhoff and "Hoffalicious" and "Hoff-crazy." And so I went down to Australia and they thought I would be offended and I wore a T-shirt that said "Don’t Hassle The Hoff." Bam! This brand has just taken off.

Dow Chemical to Merge Unit With Olin (Dealbook)
Dow Chemical on Friday took another step to streamline itself in the face of pressure from the activist investor Daniel S. Loeb, agreeing to separate its chlorine business and merge it with the Olin Corporation, another chemical company. The deal will deliver about $5 billion to Dow, including about $2 billion in cash, and it is structured as a tax-efficient Reverse Morris Trust transaction. The enlarged Olin will have revenue of about $7 billion. The shedding of another big Dow business comes just months after the big chemical company agreed to add four new independent directors to its board. That was a breakthrough in what until late November had been an escalating fight between Dow and Third Point, the hedge fund run by Mr. Loeb.

Yahoo!’s Mayer trying to appease activists (NYP)
“She is very worried about the activists assembling a slate,” a source said. Yahoo! has been under pressure from Starboard Value, which has sent Mayer a string of critical letters. She’s “100 percent focused on revenue” and is making sure the quarter-to-quarter numbers look the best they can, sources tell On the Money.

Pershing Square Said Near Deal to Move to New NYC Tower (Bloomberg)
Pershing Square would take about 49,000 square feet (4,550 square meters) for offices on the 34th and 35th floors, as well as lease space in the basement for a gym, according to the person, who asked not to be identified because the discussions are private.

After ABN Amro Forgoes Raises, I.P.O. May Go Ahead (Dealbook)
The Dutch government will reconsider selling off ABN Amro, the finance minister, Jeroen Dijsselbloem, said on Sunday, after senior managers agreed to give up an increase in pay that had stalled progress on the state-owned lender’s proposed share listing. In the face of a widespread public outcry, the managers said on Sunday that they would forgo raises of 100,000 euros ($110,000) each, which had been approved by the supervisory board for six members of the managing board, though not for the bank’s chief executive, Gerrit Zalm.

Lobbyist Says Roundup is safe -- but refuses to drink it (UPI)
Lobbyist Patrick Moore told a French TV interviewer Monsanto's Roundup weed killer is safe to drink -- but he subsequently declined an offered glass. Moore told an interviewer for French station Canal+ that glysophate, the active ingredient in Roundup, is not responsible for rising cancer rates in Argentina. The World Health Organization's International Agency for Research on Cancer announced last week the results of a study that concluded the chemical is "probably carcinogenic to humans." Moore countered the chemical is not harmful, even when directly ingested. "You can drink a whole quart of it and it won't hurt you," he said. Moore balked, however, when the interviewer offered him a glass of Roundup and asked if he would drink it. "I'm not stupid," Moore said, before again saying the product is "not dangerous to humans." Moore said people who "try to commit suicide" by drinking the herbicide "fail regularly."

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Opening Bell: 02.06.13

RBS Fined $612M by Regulators for Manipulating Libor Rate (Bloomberg) The lender will pay $325 million to the U.S. Commodity Futures Trading Commission, $150 million to the Department of Justice and 87.5 million pounds ($137 million) to the U.K.’s Financial Services Authority, the CFTC said in a statement today. RBS said it will recoup about 300 million pounds to pay the fines by cutting bonuses and clawing back previous awards. The bank’s Japanese unit agreed to plead guilty to wire fraud as part of a deal with the Justice Department, the CFTC said. “The public is deprived of an honest benchmark interest rate when a group of traders sits around a desk for years falsely spinning their bank’s Libor submissions, trying to manufacture winning trades,” said David Meister, the CFTC’s director of enforcement. “That’s what happened at RBS.” Nasdaq Faces Facebook Fine (WSJ) Nasdaq is in preliminary talks with the Securities and Exchange Commission over a potential settlement related to its botched handling of Facebook's much-anticipated offering, according to people with knowledge of the discussions. While a settlement agreement isn't assured, the two sides are discussing a monetary penalty of about $5 million, people involved with the discussions said. In addition, Nasdaq has offered to compensate customers $62 million for losses stemming from Facebook IPO trades. U.S., S&P Settle In for Bitter Combat (WSJ) The lawsuit, filed in a federal court in Los Angeles, represents the Justice Department's most aggressive move yet to try to hold accountable companies that were at the center of the financial meltdown. While banks and others have settled with the government and a settlement is possible in the S&P case, both sides indicated Tuesday that they were preparing for a long and costly legal fight. William Black, a former regulator at the Federal Home Loan Bank Board, said U.S. officials seem "willing to push this case harder than with any financial-crisis case against a major bank." The government's case relies heavily on emails and other communications that allegedly show S&P officials knew the housing market was collapsing but dragged their feet on downgrading hundreds of securities because executives worried the firm would lose business and anger clients. In March 2007, an analyst sent colleagues song lyrics about the deteriorating market, set to the tune of the Talking Heads 1980s song "Burning Down the House," according to the government's complaint. Minutes later, the analyst sent a follow-up email: "For obvious, professional reasons please do not forward this song. If you are interested, I can sing it in your cube ;-)." Default in 10 Months After AAA Spurred Justice on Credit Ratings (Bloomberg) In May 2007, Standard & Poor’s confirmed its initial AAA ratings on $772 million of a collateralized debt obligation known as Octonion I. Within 10 months, the Citigroup Inc. deal defaulted, costing investors and the bank almost all their money. The CDO, which repackaged mortgage-backed securities and other similar bundles of debt, was among dozens of transactions valued at tens of billions of dollars in 2007 that the ratings firm never should have blessed, the Justice Department said Feb. 4 in a lawsuit filed in Los Angeles. Octonion I underscores how inflated grades during the credit boom contributed to more than $2.1 trillion in losses at the world’s financial institutions after home-loan defaults soared and residential prices plummeted. “During this period, nearly every single mortgage-backed CDO that was rated by S&P not only underperformed but failed,” Attorney General Eric Holder said yesterday at a news conference. “Put simply, this alleged conduct is egregious, and it goes to the very heart of the recent financial crisis.” Monopoly Fans Vote To Add Cat, Toss Iron (NYP) Scottie dog has a new nemesis in Monopoly after fans voted in an online contest to add a cat token to the property trading game, replacing the iron, toy maker Hasbro Inc. announced Wednesday. The results were announced after the shoe, wheelbarrow and iron were neck and neck for elimination in the final hours of voting that sparked passionate efforts by fans to save their favorite tokens, and by businesses eager to capitalize on publicity surrounding pieces that represent their products. The vote on Facebook closed just before midnight on Tuesday, marking the first time that fans have had a say on which of the eight tokens to add and which one to toss. The pieces identify the players and have changed quite a lot since Parker Brothers bought the game from its original designer in 1935. Fed Says Internal Site Breached by Hackers, No Critical Functions Affected (Reuters) The admission, which raises questions about cyber security at the Fed, follows a claim that hackers linked to the activist group Anonymous had struck the Fed on Sunday, accessing personal information of more than 4,000 U.S. bank executives, which it published on the Web. "The Federal Reserve system is aware that information was obtained by exploiting a temporary vulnerability in a website vendor product," a Fed spokeswoman said. "Exposure was fixed shortly after discovery and is no longer an issue. This incident did not affect critical operations of the Federal Reserve system," the spokeswoman said, adding that all individuals effected by the breach had been contacted. HSBC's Global Spread Left It Open To Crime, Says CEO (Reuters) "Our structure was not fit for purpose for a modern world," Stuart Gulliver told lawmakers on a British banking inquiry on Wednesday. "Our geographic footprint became very attractive to trans-national criminal organizations, whether they are terrorist in origin or criminal in origin." HSBC, whose former slogan "The world's local bank" reflects its presence in more than 80 countries, was in December given a $1.9 billion fine, the largest ever imposed on a bank, following a U.S. investigation into its Mexican and U.S. operations. Florida Keys 'Sea Hag' Gets 30 Years in Prison for Shooting Man Who Refused to Give Her Beer (NBC) The Florida Keys woman known as "the sea hag" who shot and killed her neighbor after he refused to give her a beer has been sentenced to 30 years behind bars. Dukeshire, who was facing a first-degree murder charge and made a deal with prosecutors, submitted a statement to the judge saying she was remorseful and would pay the rest of her life for losing her composure. Police say Dukeshire had approached Mazur outside his Conch Key home and asked him for a can of Busch Light. "Do you have a cold beer for me?" she asked, according to a Monroe County Sheriff's Office report.

Opening Bell: 06.07.13

‘This Will be the Most Important Payroll Release in Years’ (WSJ MoneyBeat) Every payrolls day is a hype-fest, but particularly today. Today’s release will be the “most important payroll release in years”, wrote Michael Hartnett, chief investment strategist at Bank of America Merrill Lynch. It follows “the seventh-worst month of returns for fixed income since ’85 and the largest week of bond fund redemptions since Oct ’08,” the bank says. So, no pressure. The consensus forecast gathered by Dow Jones Newswires is for a rise of 169,000 in the reading for May, with an unchanged employment rate of 7.5%. Draghi lauds ‘most successful’ ECB action (FT) A combative Mario Draghi, president of the European Central Bank, strongly defended one of his bank’s most unorthodox and controversial moves of the eurozone crisis as “probably the most successful monetary policy measure undertaken in recent times”. Pressure in Britain Over What to Do With Bailed-Out Banks (DealBook) “As we move closer to an election, the share prices of R.B.S. and Lloyds will become more scrutinized,” said Peter Hahn, a banking professor at the Cass Business School in London. “Whoever is in government, selling shares in these banks will be a top priority.” ... The British government’s quandary over the banks stands in contrast with the experience of the United States Treasury Department, which reduced the government’s stakes in the big banks more quickly. Criminal Cases Loom in Rate Rigging (WSJ) U.S. and British authorities are preparing to bring criminal charges against former employees of Barclays for their alleged roles trying to manipulate benchmark interest rates, according to people familiar with the plans, marking an escalation of a global investigation now entering its sixth year. The charges are likely to be filed this summer, these people said, roughly a year after the big British bank became the first institution to settle over allegations that it attempted to rig the London interbank offered rate, or Libor, and other widely used financial benchmarks. NSA taps in to user data of Facebook, Apple, Google and others, secret files reveal (Guardian) The files also reveal terrible PowerPoint skills. ‘Hey, gals – be a ho!’: Pimps’ lawyer hails great pay, benefits (NYP) “I’m trying to find a job myself that pays me 10 grand a week,” defense lawyer Howard Greenberg said as summations began in the Manhattan Criminal Court trial of Vincent George Sr. and Jr., admitted father-and-son pimps. “One wonders in this economy if a girl can make up to 10 grand a week . . . Why more women don’t do it, I don’t know,” the lawyer said, arguing that there is no proof that the Georges’ pampered staff of five hookers was forced to do anything. The Georges admit they’re pimps. But they insist that they’re really nice pimps and that their stable of five women commuted happily, six nights a week, from their employer-provided houses in Allentown, Pa., to the bars of fancy Midtown hotels, where they’d hand out “masseuse” cards to randy male tourists. “The girls wanted for nothing. There was maternity leave — can you imagine that? In short, the benefits package was great,” Greenberg said. S&P cuts outlook on Brazil sovereign rating (FT) S&P said slow economic growth, expansionary fiscal policy that was likely to lead to an increase in the government’s debt burden, and “ambiguous policy signals” in decision-making were among the factors behind the surprise move. “The negative outlook reflects the at least one-in-three probability that a rising government debt burden and erosion of macroeconomic stability could lead to a downgrade of Brazil over the next two years,” the agency said. Japan's Pension Fund to Buy More Stocks (WSJ) The Government Pension Investment Fund, at a joint news conference with Japan's welfare ministry, said it has raised its target portfolio allocation of domestic stocks to 12% from the current 11%. The fund also said it would increase its allocation of overseas assets and cut back on low-yielding Japanese bonds. The GPIF is the world's largest public pension with ¥112 trillion yen ($1.16 trillion) in assets. It is closely watched by many investors for hints about potential portfolio rebalancing, which could have broad implications for financial markets. Record outflows from US junk bond funds (FT) US high-yield funds saw a record $4.63bn in outflows for the week ending on Wednesday, according to Lipper. Interest rate volatility has surged in recent weeks since benchmark Treasury yields have risen sharply, with selling spilling over into other key areas of the bond market. As exchange traded fund providers and mutual funds face redemptions, they are forced to sell more of their holdings, putting further pressure on prices. “We are definitely worried that the market is in a cycle where selling of bonds begets more selling,” said Steven Boyd, principal at Halyard Asset Management. Pimco Defends $8.5 Billion BofA Mortgage Accord (Bloomberg) Bank of America Corp.’s $8.5 billion mortgage-bond settlement is “outstanding” for investors, said a Pacific Investment Management Co. executive, who defended the deal against opposition. The settlement was reached after an investor group that included Pimco and BlackRock Inc. (BLK) at first demanded $12 billion, eventually coming down to a “take or leave it” offer of $8.5 billion, Kent Smith, an executive vice president at Pimco who helped negotiate the agreement, testified yesterday. “It’s an outstanding deal, and it’s in the best interest of our clients to support it,” Smith said. Smith was the first witness to testify in a trial over the agreement, which is being considered by Justice Barbara Kapnick of New York State Supreme Court in Manhattan. Forest braces for third bout with Icahn (Reuters) Forest Laboratories Inc is trying to avert yet another bitter proxy battle with billionaire investor Carl Icahn ahead of its annual investor meeting this summer, according to two sources familiar with the situation. ... Last year's proxy battle, for example, ended with just one of Icahn's four nominees being elected to the board - Pierre Legault, the former chief financial officer of OSI Pharma. Legault has since distanced himself from Icahn, telling people that he didn't know the investor well and wasn't "his guy", one of the sources said. Bono Sings to Warren Buffett (CNBC) "Home on the Range"; there is video. Russia's Vladimir Putin and wife Lyudmiladivorce (BBC) "It was a joint decision: we hardly see each other, each of us has our own life", Mr Putin said. Mrs Putin had rarely been seen in public in recent months, prompting much speculation in Russian media. She is known to dislike publicity, and told the TV reporter that flying was difficult for her. "Vladimir Vladimirovich is completely drowned in work," she said.

(Getty Images)

Opening Bell: 12.20.17

The Winklevii have been officially redeemed; the bond trader bonus doughnut; Wall Street is ambivalent on the tax bill; insider trading at Coinbase?; drive-thru funerals; and more.

Opening Bell: 08.03.12

JPMorgan London Whale Was Prodded (WSJ) A JPMorgan executive encouraged the trader known as the "London whale" to boost valuations on some trades, said a person who reviewed communications emerging from the bank's internal probe of recent trading losses. After reviewing emails and voice-mail messages, the bank has concluded that Bruno Iksil, the J.P. Morgan trader nicknamed for the large positions he took in the credit markets, was urged by his boss to put higher values on some positions than they might have fetched in the open market at the time, people familiar with the probe said. The bank's conclusion is based on a series of emails and voice communications in late March and April, as losses on his bullish credit-market bet mounted, the people said. The bank believes they show the executive, Javier Martin-Artajo, pushing Mr. Iksil to adjust trade prices higher, according to people close to the bank's investigation. At the time, Mr. Martin-Artajo was credit-trading chief for the company's Chief Investment Office, or CIO. RBS Loss Widens (WSJ) The 82%-government-owned bank reported a net loss of £1.99 billion ($3.09 billion), wider than the loss of £1.43 billion a year earlier. However, the result was hit by a £3 billion accounting charge for the fair value of the company's debt and a number of provisions for misselling financial products. Analysts focused on the more-positive underlying figures for the half, helping to make its shares the leading gainer on the FTSE 100. Excluding the own-debt charge, RBS would have posted a net profit of £287 million. It posted an operating profit of £1.83 billion, down from the £1.97 billion a year earlier. Nevertheless, RBS warned that it faces a number of lawsuits. The bank is cooperating with regulators in the U.S., Japan and the U.K., who are probing whether banks colluded to try and rig benchmark rates including the London interbank offered rate. RBS said that it had fired a number of traders following the investigations but said it was too early to estimate the fines the bank may have to pay. RBS’s CEO Blames Libor-Manipulation On ‘Handful’ Of Individuals (Bloomberg) RBS dismissed four employees for trying to influence the individual responsible for Libor submissions following an internal investigation, the bank said today, without identifying the staff involved. Hester said it is too early to estimate the potential cost of fines and litigation linked to rate-rigging. “The Libor issue is more to do with the wrongdoing of individuals than it is to do with a systemic problem,” Hester, 51, said on a call with journalists today after the Edinburgh- based bank reported a 22 percent drop in second-quarter operating profit. “It’s hugely regrettable that the actions of a relatively small number of wrongdoers, which seems to be the key issue here, has such a tainting effect on the industry.” Knight Said To Open Books To Suitors As Loss Pressure Grows (Bloomberg) Bank of America Corp. was among several potential partners that was in talks with Knight yesterday, said a person with knowledge of the matter. John Yiannacopoulos, a Bank of America spokesman, declined to comment. Loss Swamps Trading Firm (WSJ) Knight wouldn't comment on the status of the rescue talks. But market participants said the firm is running out of time. In the span of two days, the company's market value has plunged to $253.4 million from $1.01 billion, and its shares continued their nosedive in after-hours trading. "If they don't get an investor within the next 48 to 72 hours, I think Knight's going to have trouble surviving," said David Simon, chief executive of hedge fund Twin Capital Management LLC. Mt. Sinai urologist busted on charges he used spy cam to peek up subway riders’ skirts (NYDN) Dr. Adam Levinson, an assistant professor of urology at the hospital’s school of medicine, allegedly clipped a pen camera to a folded newspaper so he could peek up a woman’s skirt on a southbound 4 train about 5 p.m. Tuesday, authorities and a witness said. Sheldon Birthwright, 46, a construction worker who once worked for the Transportation Security Administration, said he sensed something wrong almost immediately after Levinson stepped on the train at E. 59th St. The doctor — a New York Medical College grad who twice won a national Patients’ Choice Award — held the newspaper at his side as he inched toward a woman wearing a knee-high dress and reading a Kindle. “He’s leaning on the pole right next to the door,” Birthwright told the Daily News. “He has a paper in his hand. But what’s mysterious about it, there’s a pen attached to the paper...He has it down in a very unsuspicious way. But every time the woman would move, he would move.” Catholic Fund Fails To Convince Believers (FT) JPMorgan Asset Management had hoped to attract investors who wanted exposure to investments that would not clash with tenets on issues such as birth control and civil rights. It also eschewed investments in governments of countries that have the death penalty. The aim was to replicate the success of funds compliant with Shariah law which have been in strong demand with Muslim investors. However, JPMorgan is to liquidate the Global Catholic Ethical Balanced Fund just over a year since it was launched. At May 31, it had net assets of just 4.3 million euros ($5.24 million), far short of a $30 million threshold outlined in its prospectus. Fake-bookers (NYP) Facebook admitted that some 83 million of the social network’s 955 million total users are fakes — meaning duplicates, spam or silly pages for pets. That represents nearly 9 percent of profiles on the site. The rash of fakes — equal to the population of Egypt — has shot up since Facebook’s rocky public debut in May, when it estimated “false” profiles accounted for 5 percent to 6 percent of its users. “These estimates are based on an internal review of a limited sample of accounts, and we apply significant judgment in making this determination, such as identifying names that appear to be fake or other behavior that appears inauthentic,” the company said in a recent regulatory filing. The spike is a major cause for concern, with advertisers and investors questioning Facebook’s effectiveness in reaching consumers. In particular, Facebook has been under scrutiny for slowing ad sales growth. Economy Adds 163,000 Jobs (WSJ) U.S. employers stepped up hiring in July as the economy continued its uneven recovery heading into this fall's presidential election. U.S. payrolls increased by a seasonally adjusted 163,000 jobs last month, the Labor Department said Friday, but the unemployment rate, obtained by a separate survey of U.S. households, ticked up one-tenth of a percent to 8.3%. Economists surveyed by Dow Jones Newswires expected a gain of 95,000 in payrolls and an 8.2% jobless rate. Family kept grandparents' deaths secret from Chinese diver until she won gold medal (YS) Chinese diver Wu Minxia's celebrations at winning a third Olympic gold medal were cut short after her family revealed the details of a devastating secret they had kept for several years. Wu's parents decided to withhold news of both the death of her grandparents and of her mother's long battle with breast cancer until after she won the 3-meter springboard in London so as to not interfere with her diving career. "It was essential to tell this white lie," said her father Wu Yuming...Wu's mother defended the decision to keep her situation private and admitted she only broached the subject of her breast cancer at this point because she is now in remission. Both of Wu's grandparents died more than a year ago, but the diver knew nothing of their passing until this week.

Opening Bell: 11.02.12

Economy Adds 171,000 Jobs (WSJ) U.S. payrolls increased by a seasonally adjusted 171,000 jobs last month, the Labor Department said Friday. The politically important unemployment rate, obtained by a separate survey of U.S. households, rose one-tenth of a percentage point to 7.9%. Economists surveyed by Dow Jones Newswires expected a gain of 125,000 in payrolls and a 7.9% jobless rate. Hedge Fund Cashes In On Greek Bonds (Reuters) London-based hedge fund Adelante Asset Management has made a 70 percent gain on a sale of Greek bonds, showing the potential for big profits from betting on a recovery in the fortunes of a country effectively off-limits to investors a few months ago...Since the restructuring, Greek government bond prices have strengthened, allowing Adelante to sell them for around 24 cents on the euro, having bought them for around 14 cents in June, the company said. A Greek government bond maturing in 2042, for example, is currently trading at around 20.8 cents on the euro, Thomson Reuters data shows. Other hedge funds have made similar bets. Third Point, a high profile New York hedge fund, for example, has been a significant buying of cut-price Greek bonds. RBS Eyes Libor Settlement Soon (WSJ) RBS wants to seal a settlement with regulators over its alleged rigging of key interest rates in the coming months, as the partstate-owned bank looks to draw a line under the scandal. Speaking to reporters at the bank's third-quarter results presentation, Chief Executive Stephen Hester said he would be "disappointed" if he couldn't provide details on a settlement by February. "We are up for settling with all and everyone as soon as they are ready. But each regulator has to satisfy itself that it has all the facts," he said. Deutsche Bank Faces Top Surcharge as FSB Shuffles Tiers (Bloomberg) Deutsche Bank would be required to hold more capital and Bank of America Corp.’s burden stands to be reduced as global regulators shuffled the competitive balance among the world’s biggest banks. Citigroup, HSBC and JPMorgan join Deutsche Bank as firms that will be targeted for a capital surcharge of 2.5 percent, according to an updated list published yesterday by the Financial Stability Board. The change means Bank of America already exceeds requirements, while Deutsche Bank would be more than 2 percentage points below the new minimum of 9.5 percent. “That limits earnings potential for Citigroup, JPMorgan and Deutsche Bank compared to Bank of America, all other things being equal, so it’s certainly a competitive advantage for them,” said David Kass, a professor at the University of Maryland’s Robert H. Smith School of Business. Short-Sellers of Europe Set to Be Unmasked (CNBC) The European Securities and Markets Authority (ESMA), the EU regulator, has issued new rules on the short-selling of securities indicating that anyone with short positions of greater than 0.2 percent in an EU company’s shares must report it to regulators. Positions of more than 0.5 percent will be publicly released, naming both the company and the short-seller. Public disclosure is triggered any time that level is hit with each 0.1 percent increase or decrease after that. NYSE Open For Business Shows Wall Street Still Vulnerable (Bloomberg) The Securities and Exchange Commission may consider whether exchanges’ emergency regimens need to be bolstered, according to a person familiar with the regulator’s thinking who asked not to be named because the matter is private. The industry’s decision to halt equities and bond trading shows the challenge of maintaining markets when a catastrophe threatens New York City, home to 168,700 securities industry workers. “One of the purposes of having electronic exchanges and basing them away from New York City is for the market to be more robust and stay open,” Charles Jones, a finance professor at Columbia Business School in New York, said in a phone interview. “This is what the back-up plans were designed for. But the markets didn’t open.” David Blaine Entertains New Yorkers After Hurricane Sandy (NYP) When a backup generator at Old Homestead Steakhouse sputtered, the restaurant started serving hundreds of pounds of steaks, burgers, lobster tails and shrimp on the street outside for downtown denizens. David Blaine, the modern-day Harry Houdini who spent days recently being shocked in a steel suit, pitched in to provide spontaneous street entertainment. “David was rumbling by on his motorcycle, and he stopped to see why there was a line on 14th Street,” said a spy, adding 800 chowed down. Blaine then asked restaurant co-owner Greg Sherry if there was a deck of cards in the house. Blaine used the full deck and some spare silverware to perform magic tricks outside for an hour and a half. The magic man, an Old Homestead regular, was offered a doggie bag but said he’s on a special diet in preparation for his next stunt. Romney Faces Sale With A Win (WSJ) Mr. Romney's assets, valued at between $190 million and $250 million, include investments in hedge funds, private-equity funds and partnerships at Bain Capital, which he ran for 15 years. These entities have ownership stakes in dozens of companies that could be affected by government action, such as radio firm Clear Channel Communications Inc. and a video-surveillance firm based in China. Many businessmen and wealthy individuals have entered government service and sold off holdings. But a Romney sale would be especially complicated. Investments in private-equity funds can be difficult to value and seldom change hands. Any sale would have to be handled carefully to avoid any appearance that the incoming president was getting favorable treatment from a buyer. What Do Asia Markets Fear? Romney As President (CNBC) At a time of heightened uncertainty, with the ongoing European debt crisis and the upcoming leadership transition in China, a new president in the world’s largest economy will cause additional nervousness among Asian investors, experts told CNBC. “Asian traders don’t like change in leadership. You would see weakness in the markets if Romney won, because people would question how well he would deal with the impending doom of the ‘fiscal cliff.’ Obama would be a safer bet, as investors would enjoy continuity at a time of a lot of uncertainty,” said Justin Harper, market strategist, at IG Markets...Besides, Romney’s stance on China is particularly worrying feels Harper. The presidential hopeful has said he will name China a “currency manipulator,” which could lead to more tensions with the mainland, including on the trade front. “You would expect trade between the two nations to suffer, this would have a knee-jerk reaction on trade in the region,” he added. Fed Up With Fees (NYP) The manager of a large public pension’s private-equity program said for the last 24 months he has not committed money to any new private-equity fund that doesn’t give all fees it charges its companies back to investors. He is doing this because he wants an alignment of interest where he and the private-equity firm only make money by reselling a business. PE firms, he believes, will stop charging their companies fees if there is little in it for them. So, KKR, for example — responding to pressure — has agreed to give all fees it charges its companies in its new fund back to investors, the pension manager said. KKR is not the only firm making this change. Apax Partners, Blackstone Group, Centerbridge Partners, Providence Equity and TPG Capital are among those making the same concessions, the pension manager said. Local shelter mistakenly euthanizes family pet (WRCB) After waiting 10 days to be reunited with his dog, a local college student learned the family's pet had been euthanized by mistake. The Lab mix was being held at McKamey Animal Center, where administrators say a paperwork mix up led to the dog's death. Matt Sadler adopted the three-year-old Lab mix when he was just a puppy. "That was my best friend," Sadler says. "He was there for me through my parents' divorce and a lot of really hard tough times in my life." It was hard for Matt when Zion was quarantined last week, after jumping on a pizza delivery driver. "The lady didn't want to press charges, it wasn't anything serious, but the law has a 10-day quarantine period," he says. Because Zion was a month past due on his yearly rabies vaccine, he was held for the full 10 days at McKamey Animal Center. Thursday, Matt eagerly returned to the facility to take Zion home. "She says, ‘I'm sorry, Matt, we accidentally euthanized your dog'," Sadler says...McKamey has offered to cremate Zion, and allow Matt to adopt any dog he chooses.

Opening Bell: 05.03.12

Banks Get Silent Treatment At Fed Meeting (WSJ) A meeting Wednesday between a top Federal Reserve official and six bank bosses was notable largely for long silences from the central bank's side of the table. Fed governor Daniel Tarullo met with the executives to discuss the recent "stress tests" and to hear out the banks' concerns over proposed new regulations. Mr. Tarullo and the bankers exchanged thoughts about the tests, but the Fed official didn't respond when the chief executives laid out their new-rule concerns, starting with a Fed proposal to limit the biggest banks' exposure to other firms and governments, said people familiar with the meeting. Carlyle Prices IPO At Lower Range (WSJ) The downshift came after some mutual-fund investors pushed for a better deal, said people familiar with the matter. Also, they said, Carlyle hoped a lower price would help ensure good first-day and longer-term performance. People close to Carlyle said the firm could have stuck with a price in the original range, but it wished to attract some larger investors who wanted a lower price. Carlyle Founders’ Stakes Valued at $1 Billion Each Post-IPO (Bloomberg) “This is their legacy,” Reena Aggarwal, a finance professor at Georgetown University’s McDonough School of Business in Washington, said in a telephone interview. “They started the firm from nothing, so their human capital and their financial wealth are tied up in the company. They need to have this liquidity event.” U.S. documents allege HSBC money-laundering lapses (Reuters) ...documents allege that from 2005, the bank violated the Bank Secrecy Act and other anti-money laundering laws on a massive scale. HSBC did so, they say, by not adequately reviewing hundreds of billions of dollars in transactions for any that might have links to drug trafficking, terrorist financing and other criminal activity. In some of the documents, prosecutors allege that HSBC intentionally flouted the law. The bank created an operation that was a "systemically flawed sham paper-product designed solely to make it appear that the Bank has complied" with the Bank Secrecy Act and is able to detect money laundering, wrote William J. Ihlenfeld II, U.S. Attorney for the Northern District of West Virginia, in a draft of a 2010 letter addressed to Justice Department officials. Buffett Trails S&P 500 for Third Straight Year (Bloomberg) FYI. Fancy A Drink With Richard Branson? (Virgin via Daily Intel) Richard Branson is now on board all Virgin Atlantic flights 'in spirit' - thanks to new Little Richard ice cubes. Virgin Atlantic is giving Upper Class passengers the chance to cool their in-flight drinks with bespoke Richard Branson ice cubes. They will be served on board one of the first flights of the airline's new Upper Class Cabin this May... The ice cubes have been created using the exact measurements of Sir Richard's head and feature an impressive level of detail. The mould for the ice cubes took a team of four skilled designers a painstaking six weeks to create using detailed photographic techniques and laser scanning technology to create the perfect likeness of Sir Richard. Jobless claims tumble, calms job market fears (Reuters) The number of Americans filing new claims for jobless aid fell more than expected last week, easing fears the labor market recovery was stalling. Initial claims for state unemployment benefits dropped 27,000 to a seasonally adjusted 365,000, the Labor Department said on Thursday. The biggest weekly drop in claims since early May last year helped to lift some of the dark cloud cast over the labor market by a report on Wednesday from payrolls processor ADP showing private employers in April created the fewest jobs in seven months. John Arnold Retiring At 38 (NYP) Arnold, who has an estimated net worth of $3.5 billion, said in a letter to investors that he was closing the Centaurus Energy Master Fund in order to "pursue other interests." In the letter, he said the fund had performed "better than I could have hoped for or imagined" with returns on investments consistently high, "often in triple digits." Arnold was a major force behind the rapid rise of energy trader Enron in the 1990s. SocGen Profit Hit by Restructuring Plan (WSJ) Société Générale said Thursday that first-quarter earnings at its investment bank rebounded from the tough previous quarter but fell from the year-earlier period, pressured by a restructuring plan aimed at sheltering the French bank from Europe's still-smouldering debt crisis. Société Générale, France's second-largest lender by market value and the first to report quarterly earnings, said net profit dropped 20% to €732 million ($963.2 million) from €916 million a year earlier, hit mainly by losses on loan portfolios it sold. Independent Counsel For MF Global Is Sought (WSJ) Criminal and civil investigators have been looking into the case, but so far have said little about the progress of their investigation. That has led some Republicans and customers of MF Global to question whether the investigation is being slowed by a desire to show deference to the firm's former chief executive, Jon Corzine. Mr. Corzine, a former U.S. senator and governor of New Jersey, has been a prominent Democratic fund raiser and supporter of the Obama administration. The letter circulated by Rep. Grimm's office acknowledges that while "we have no direct evidence" that the Department of Justice "is providing special treatment…perception matters a great deal." Still, the letter concludes that "an independent investigation is urgently needed." Kona teen nears perfect school attendance record for 13 years (WHT) Cetraro thinks improving and encouraging attendance requires a more comprehensive approach, one that goes beyond sanctions. When Cetraro was in elementary school, she appreciated privileges like running in the sprinklers, being first in line for lunch or dismissal, having the chance to act as the teacher’s assistant and getting shave ice. She said these incentives served as powerful motivators.

Opening Bell: 01.24.13

Witness Adds Thread To SAC Probe (WSJ) A government informant has implicated a prominent former trader at SAC Capital Advisors, telling federal investigators the two swapped confidential stock tips for years, according to people briefed on the matter. The connection between ex-SAC portfolio manager Dipak Patel and the undercover mole, a California-based former portfolio manager at an investment fund, hasn't previously been disclosed. Mr. Patel and his lawyer didn't respond to requests for comment...Mr. Patel, who hasn't been charged with any wrongdoing, was a technology-stock manager who worked under Mr. Cohen for years before leaving in 2010. Obama To Name White As SEC Chief (WSJ) President Barack Obama on Thursday will name Mary Jo White, a former star prosecutor who pursued terrorists and mobsters in New York, to lead the Securities and Exchange Commission, a White House official said. Barclays CEO Says Bank Was Too Aggressive, Too Self-Serving (CNBC) The bank which paid a fine of 290 million pounds for manipulating Libor and was caught up in the payment protection insurance scandal, has been trying to turn a new leaf. Jenkins, who took over as CEO in August, said the company was addressing its past mistakes. "We were too aggressive, we were too short-term focused and too self-serving," Jenkins told CNBC at the World Economic Forum in Davos. "The industry, and Barclays, got it wrong on occasions," he added. Merkel Says Europe Must Persist With Reforms (CNBC) German Chancellor Angela Merkel urged European nations to continue the economic reforms they have begun and argued that the debt crisis offered an opportunity for the bloc to become more competitive. "The political experience is that often you need pressure for political structural reforms," she told delegates at the World Economic Forum in Davos, Switzerland. "If Europe is in a difficult situation today we need to implement structural reforms now so that we may live better tomorrow," she said. Knight Capital's Profit Slides 84% (WSJ) Profit in the quarter to Dec. 31 fell to $6.5 million from $40.2 million a year earlier, with per-share earnings sliding to a penny from 43 cents, below the three-cent consensus among analysts polled by Thomson Reuters. Revenue fell 16% to $287.7 million. Jobless Claims Fall To 5-Year Low (WSJ) Initial jobless claims, a measure of layoffs, fell by 5,000 to a seasonally adjusted 330,000 in the week ended Jan. 19, the Labor Department said Thursday. Economists surveyed by Dow Jones Newswires expected 360,000 new applications for jobless benefits last week. Two men charged with robbery, assault and battery after stealing $400 from Girl Scouts selling cookies (NYDN) Two men are being held on charges they stole nearly $400 from a group of Girl Scouts selling cookies at a store in Massachussetts. An adult supervising the Scouts suffered a broken nose and arm injuries trying to stop the men. Authorities say 22-year-old Nicholas Taverna of Greenfield and 25-year-old Cassidy Michalski of Deerfield were held on $5,000 bail each at their arraignment Tuesday on charges of unarmed robbery, assault and battery with a dangerous weapon and shoplifting. Police say the suspects stole two cellphones from the Walmart in Northampton on Saturday and tried to trade them for drugs in Holyoke. When that failed, they returned to Northampton where they had seen the 11- and 12-year-old Scouts earlier, and stole their cash box. US Lawmaker Set to Unveil Financial Revamp (Reuters) The proposal, expected as early as this week, will come from House Ways and Means Committee Chairman Dave Camp, whose panel has been exploring a broad tax code overhaul for more than a year. Camp wants to slash the top corporate tax rate to 25 percent from 35 percent and simplify the code.Critics of the current corporate tax system note that the United States has one of the steepest corporate tax rates in the world. Commerzbank to Cut 6,000 Jobs (WSJ) The cuts, representing up to 12% of the bank's 49,215 full-time staff, will affect all group levels and units, in Germany and abroad, although online bank Comdirect AG and Polish unit BRE Bank will be excluded, according to an internal memo to staff. Japan Posts Record Trade Deficit (WSJ) Japan's trade deficit nearly tripled to a record ¥6.927 trillion ($78.3 billion) last year and few expect a drastic improvement anytime soon, leaving Tokyo no choice but to carry on with efforts to boost the economy. Citigroup’s Corbat Says Environment to Stay ‘Challenging’ (Bloomberg) “People recognize the times we are in, these are challenging times,” Corbat, 52, said in an interview with with Bloomberg Television’s Erik Schatzker at the World Economic Forum in Davos today. “Things will remain challenging going forward for a period of time. Our people recognize that.” Corbat replaced the ousted Vikram Pandit as CEO at the third-biggest U.S. bank in October. He has since announced plans to fire about 11,000 employees and pull back from certain markets as he seeks to cut Citigroup’s costs and boost rewards for shareholders. Profit at the lender’s ongoing businesses slid 8 percent last year while costs rose. Citigroup cut investment bankers’ bonuses by 10 percent to 20 percent globally after a revenue slump, people with knowledge of the matter said last week. Corbat said the firm can still be “absolutely competitive,” on banker pay. “I think morale is good,” he said, without saying whether the company plans to cut more jobs. “Our employees are very confident around the strategy if you think about what’s going on in the world today.” N.J. men sue Subway, claim they've been shorted on footlong sandwiches (AP) The suit, filed Tuesday in Superior Court in Mount Holly, may be the first legal filing aimed at the sandwich shops after an embarrassment went viral last week when someone posted a photo of a footlong and a ruler on the company's Facebook page to show that the sandwich was not as long as advertised. At the time, the company issued a statement saying that the sandwich length can vary a bit when franchises do not bake to the exact corporate standards. Stephen DeNittis, the lawyer for the plaintiffs in the New Jersey suit, said he's seeking class-action status and is also preparing to file a similar suit in Pennsylvania state court in Philadelphia. He said he's had sandwiches from 17 shops measured — and every one came up short. "The case is about holding companies to deliver what they've promised," he said.

Opening Bell: 02.13.12

Société Générale to Restructure (WSJ) Société Générale said Wednesday it will roll out a restructuring plan to cut costs and boost revenue, as the French bank posted a larger-than-expected fourth-quarter loss and painted a stark picture of the outlook for retail banking in France against the backdrop of a stagnant economy...The Paris-based lender, France's second-largest publicly listed bank by market capitalization, reported a €476 million net loss ($640 million) in the three months ended Dec. 31, compared with €100 million net profit last year, well below analysts' expectations. Apple's Cook Calls Einhorn Lawsuit 'Silly Sideshow', Says Company's Not Tight-Fisted (CNBC) Wading into a controversy that was bought to a head last week by fund manager David Einhorn, Cook touted his company's investment in product development and research. The CEO rejected the basis of a lawsuit filed by Einhorn that the fund manager asserts will restrict Apple's ability to distribute its excess cash to its investors. "Frankly I find it bizarre that we would find ourselves being sued for doing something that's good for shareholders," Cook told the Goldman Sachs' Technology and Internet Conference. Apple checkmate: Another big investor backs company vs. Einhorn (NYP) The California State Teachers’ Retirement System, a $157.8 billion pension fund that owns 1.6 million Apple shares, told The Post they are siding with Apple against Einhorn. CalSTRS supports the proposal because “blank check” preferred stock “can be used as anti-takeover defenses and entrench a board,” said Anne Sheehan, the director of corporate governance. SAC Probe Said to Be Hampered by Auto-Deleted E-Mails (Bloomberg) The federal investigation of insider trading by SAC Capital Advisors LP and its founder, Steven A. Cohen, has been hampered by a lack of extensive e-mail evidence. One reason: During the period of time at the heart of the probe, July 2008, SAC automatically deleted its e-mails. Unluckily for the U.S. government, SAC changed its policy just months later, requiring preservation of electronic communications. By then, most messages relevant to the $700 million in alleged illegal trades had been erased, according to a person familiar with the matter. Until the fall of 2008, SAC e-mails were deleted from employee electronic mailboxes every 30 or 60 days, according to SAC General Counsel Peter Nussbaum. Comcast Buys Rest Of NBC's Parent (WSJ) Comcast Corp, in a bullish bet on traditional entertainment, is buying General Electric Co.'s stake in NBCUniversal for $16.7 billion, giving the cable operator full ownership of the film and television giant much sooner than expected. Kate Upton on Antarctic shoot for SI: 'My body was shutting down' (NBC) The theme of this year’s issue, which hit newsstands Tuesday, put models in exotic settings on all seven continents. Upton was sent to the most forbidding one of them all, Antarctica, to endure with frigid temperatures in skimpy outfits, including the parka top and bikini bottom she is wearing on the magazine's cover. “I was very surprised by the news that that’s where my shoot was going to be located,’’ she said on TODAY Tuesday in her first interview since making the cover. “It was freezing. I’m from Florida, so it wasn’t great for me. When I came back I was losing hearing and eyesight because my body was shutting down, it was working so hard to keep warm. I was thinking warm thoughts." Eurozone Worries Intensify (WSJ) Industrial production in the euro zone fell at its sharpest quarterly rate in more than three years at the end of last year, despite rising in December, stoking fears of a third consecutive quarterly economic contraction. But data released on Wednesday suggested the euro-zone economy reached a low point in November and could be showing early signs of recovery, as production in Germany, the currency bloc's biggest single economy, rose in December after falling for four consecutive months. Russia Says It Is Moving Away From Currency Manipulation (CNBC) FYI. ING To Cut 2,400 More Jobs (WSJ) The Netherlands' biggest bank by assets, which had about 85,000 employees world-wide at the end of the fourth quarter, is cutting costs in response to the weak European economy and tougher regulations for banks. As US Gasoline Prices Soar, Hedge Fund Oil Bets Near Record (Reuters) U.S. motorists searching for someone to blame for the highest gasoline prices ever at this time of year have an easy target: hedge funds who have been quietly amassing winning bets on hundreds of millions of barrels of oil. At a filling station in Midtown New York last week, several people were prepared to blame traders on Wall Street as they paid more than $4 per gallon to fill up their cars. "It really is not supply and demand. It's definitely speculation," said John Keegan, an exterminator with pest control company Terminate Control, who was filling up his van. A cab driver said he was convinced the price would be just $1 a gallon if the government "stopped Wall Street trading oil." No Ordinary Affenpinscher, Banana Joe Is Named Best in Show (NYT) Banana Joe, a black dog with a monkeylike face, became the first affenpinscher to win Best in Show at the Westminster Kennel Club Dog Show on Tuesday night. He defeated six dogs, one a Portuguese water dog on the same night that Bo, who is the same breed, watched his master, President Obama, deliver the State of the Union address. “He’s won a lot of big, big shows, but none like this one,” said his handler, Ernesto Lara, who held onto Joey, as he calls him, during a postshow news conference. Joey sat calmly, as if he could have gone back onto the floor of Madison Square Garden and taken on his challengers again. He stuck his tongue out as Lara answered questions. He didn’t appear to need any celebratory drinks or snacks. “I don’t think he has anything to prove,” Lara said. “I’m not bragging, this is just the way he is. The best thing is that I was in cue with him.” He added: “This isn’t a breed you train. He’s like a human. You befriend him.”