Opening Bell: 5.13.15

Democrats not feeling banking bill; Greece still screwed; Robin Hood raises $110 million; Hooters Casino Hotel sold; "Kim Jong Un Purges Defense Chief for Napping"; and more.
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Facing Vicious Debt Cycle, Greece Sprints to Apply Fixes (NYT)
Tuesday’s payment was an example. Continuing the cycle, the money Greece used to pay the I.M.F. came from a special reserve the fund requires all of its member nations to maintain. In other words, Greece used I.M.F. money to pay the I.M.F. And the money Greece is cobbling together to make other payments has come in part from state entities and municipal authorities. Unless Greece’s foreign creditors agree to forgive some of the country’s €324 billion debt, sustainable economic growth will be increasingly difficult to achieve, economists say. Making matters worse, bank depositors and investors will have less incentive to keep their money in Greece.

Democrats Greet Banking Bill With Skepticism (WSJ)
An opening gambit by Senate Banking Committee Chairman Richard Shelby (R., Ala.) to ease regulatory restrictions on smaller banks and increase scrutiny of the Federal Reserve was met with skepticism by Democrats, portending a rough road for a bill that would make the most significant changes to financial regulation since the 2010 Dodd-Frank law. While elements of the draft legislation unveiled on Tuesday are supported by both parties, congressional Democrats and the Obama administration criticized the bill as an overreach that could roll back some of the fundamental protections implemented after the 2008 financial crisis.

Banks Rethink Common Sales Tricks (WSJ)
Ever since former Jefferies Group LLC trader Jesse Litvak was sentenced in July 2014 to two years in prison for lying to customers about how much he had paid for securities, Wall Street executives have been rethinking the rules of engagement. Long-acceptable trading tactics—pretending to have paid more for a bond than one had, for example, or embellishing how many potential buyers may be interested in a particular security—have become potential criminal offenses.

Kim Jong Un Purges Defense Chief for Napping, Lawmaker Says (Bloomberg)
North Korean leader Kim Jong Un has purged his defense minister for dozing off at a rally in the latest removal of a senior official under his rule, a South Korean lawmaker said. Hyon Yong Chol, minister of the People’s Armed Forces, was captured napping in footage of the event late last month and South Korean intelligence indicates he may have been executed by firing squad, Shin Kyoung Min of the opposition New Politics Alliance for Democracy party said Wednesday by phone. Shin was citing a briefing by the National Intelligence Service. “Rumors are rampant in North Korea that he’s been executed,” Shin said. “His crime was lese majeste.”

Star-studded Robin Hood Foundation galas raise $101M (NYP)
At the main event, a crowd of more than 4,000 donors — including Wall Street tycoons David Tepper, Henry Kravis and David Einhorn — were entertained by the likes of Paul McCartney, Jimmy Fallon and Jon Bon Jovi, sources at the event told The Post. The $101 million raised is believed to be the record for a US fundraiser. Hedge fund moguls Bill Ackman, founder of Pershing Square, and Einhorn, founder of Greenlight Capital, each kicked in $25 million, to help get the total into record territory, sources said.

American Apparel Has a Dossier of Complaints Against Former CEO It Can Use (Bloomberg)
The retailer has assembled e-mails, videos and audio recordings documenting complaints by those who worked for Charney. One e-mail to the human resources department in 2013 reported that he threw a medicine bottle at an employee, according to internal documents obtained by Bloomberg News. In a separate e-mail, a female worker said he called her a “slut” and a “whore.” In a resignation letter, an employee said, “I’m afraid to return to work and face further abuse.”

Hooters Casino Hotel Sold for $70 Million (AP)
A real estate broker representing the owners of the Hooters Casino Hotel said the property near the Las Vegas Strip has sold for about $70 million to a New York-based hotel investment company. Michael Parks with CBRE Group in Las Vegas confirmed Monday the 696-room casino-hotel off Tropicana Avenue was sold May 1 to Trinity Hotel Investors LLC.

Moody's downgrades Chicago debt to 'junk' (CNBC)
Moody's downgraded Chicago's credit rating down to junk level "Ba1" from "Baa2." The announcement, which the ratings agency released Tuesday afternoon, cited a recent Illinois court ruling voiding state pension reforms. Moody's said it saw a negative outlook for the city's credit. Following that May court decision, Moody's said it believes that "the city's options for curbing growth in its own unfunded pension liabilities have narrowed considerably."

Man sneezes out rubber end of childhood toy dart after four decades (UPI)
Steve Easton, 51, claims he was playing an Internet game at his home in Camberley when a sneezing fit prompted the emergence of the object from his nostril. Unsure of what he had found, Easton called his mother, 77-year-old Pat Easton, who told him what the object was -- the end sucker piece on a toy rubber dart. Pat Easton said she had decades previously taken Steve, then 7 or 8 years old, to the hospital after he swallowed the toy, but X-rays were inconclusive. "All these years later, it suddenly shot out," she told the BBC...Easton said he carried the object around to show people who were interested in the story, but he has since disposed of it.

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Senate Report Said To Fault JPMorgan (NYT) A report by the Senate Permanent Subcommittee on Investigations highlights flaws in the bank's public disclosures and takes aim at several executives, including Douglas Braunstein, who was chief financial officer at the time of the losses, according to people briefed on the inquiry. The report's findings — scheduled to be released on March 15 — are expected to fault the executives for allowingJPMorgan to build the bets without fully warning regulators and investors, these people said. The subcommittee, led by Senator Carl Levin, could ask Mr. Braunstein and other senior executives to testify at a hearing this month, according to the people. The subcommittee does not currently intend to call the bank's chief executive, Jamie Dimon, but Congressional investigators interviewed Mr. Dimon last year. Citi CEO Is Keeping Score (WSJ) At a gathering of 300 executives last month at a Hilton Hotel in East Brunswick, N.J., Mr. Corbat proposed a slate of new, more-rigorous ways to track both the performance of individual executives and the third-largest U.S. bank as a whole, said people who were there. His approach includes score cards that will rate top managers across the New York company in five categories. "You are what you measure," Mr. Corbat told the gathering. Report Faults FSA Over Rate Rigging (WSJ) The report, commissioned by the FSA in the wake of the Barclays BARC.LN +1.48%PLC £290 million ($436.1 million) settlement with regulators over attempted rate-rigging, shows the regulator either ignored or failed to follow up on a series of red flags highlighting problems with the rates. Between 2007 and 2009, the FSA said it found 26 pieces of correspondence citing direct references to "lowballing"—where banks understated their borrowing costs to make their funding positions look stronger. These include two telephone calls from Barclays managers flagging problems with rate-setting process. The regulator also said it overlooked an article in The Wall Street Journal highlighting problems with the London interbank offered rate because the article wasn't widely read within the FSA. Heinz CEO's Golden Exit Deal (WSJ) The total would consist of a $56 million "golden parachute" including bonus payments and other items, $57 million in pension and deferred compensation and $99.7 million of Heinz shares that Mr. Johnson owns or controls, according to a Securities and Exchange Commission filing Monday. EU Said To Weigh Extra Years For Irish Rescue Loans (Bloomberg) The European Union is weighing whether to extend Ireland’s rescue loans by five years or more, buttressing the government’s efforts to become the first country to exit a bailout since the euro-region debt crisis began. Hotel boots rowdy Rodman over Kim Jong Un scene (NYP) Dennis Rodman, just back from visiting Kim Jong Un, was escorted out of the Time Hotel in Midtown on Sunday after spending hours at the restaurant bar loudly telling anyone who would listen what a great guy the North Korean dictator is. “He was at the bar at Serafina for three hours,” says a spy. “He kept saying what a nice guy Kim is, and how Kim just wants to talk to President Obama about basketball. He was waving around a signed copy of the dictator’s huge manifesto, telling everyone they should read it.” Added the witness, “Dennis was making a total jerk of himself. He wouldn’t leave, and he wouldn’t let anyone talk to him about shutting up, or what an oppressive country North Korea is. Eventually he had to leave the bar because the bartender was starting to get [bleep]ed-off.” Ikos Co-Founder Coward Sues Ex-Wife Over Hedge-Fund Software (Bloomberg) Martin Coward, the co-founder of Ikos Asset Management Ltd., sued his estranged wife, Elena Ambrosiadou, in a U.K. court over the copyright ownership of computer software that runs the hedge fund’s trading platform. Coward was the “architect” of the “bedrock of the family business,” his lawyers said at the start of a three-week trial in London today. “Practically all of the financial markets expertise at Ikos resided in Coward himself,” said Michael Bloch, Coward’s lawyer. Ikos, which uses computer algorithms to spot profitable trades in futures markets, has been embroiled in lawsuits involving Coward and other former employees around the globe. The estranged couple, who started divorce proceedings in Greece in 2009, have filed more than 40 lawsuits against each other in at least four countries. Sequester Leaves US In 'Fantasy' World: Analyst (CNBC) Stephen King, chief global economist at HSBC, said that the U.S. was living in a"fantasy world" over its growth forecasts. "If you look at the projections from the Congressional Budget Office (CBO) they assume that growth goes back to between 4 to 5 percent in real terms between 2014 and 2018. Their numbers suggest that the U.S. will post the fastest rate of productivity growth of any decade in the last 50 or 60 years," King told CNBC's "European Closing Bell." Former Lehman Derivatives Banker Helps Paschi Unravel Contracts (WSJ) Riccardo Banchetti, whose work packaging derivatives at Lehman Brothers Holdings Inc. got him the top European job at the firm a week before it failed, is now making a living unraveling the kind of deals he once developed. Banchetti worked with Banca Monte dei Paschi di Siena SpA to uncover 730 million euros ($955 million) of losses that the world’s oldest bank hid through the use of derivatives. The Italian banker, who also advised JPMorgan Chase & Co. (JPM) on its defence against fraud charges over swaps with Milan, has scrutinized more than 10 billion euros of transactions since leaving Lehman, according to a person with knowledge of his activities who asked not to be identified because they weren’t authorized to speak publicly. Drugs found in Florida suspects' orifices, deputies say (WPBF) According to the Charlotte County Sheriff's Office, a deputy who initiated a traffic stop on a car without brake lights found cocaine in a man's prosthetic leg. The deputy also found morphine and hydromorphine pills in a woman's bra and a hypodermic needle hidden in another woman's buttocks.

Opening Bell

Opening Bell: 8.14.15

Flash crash trader out on bail; Hedges funds screwed on China; Tsipras needs a friend; "Man Clogs Casino Pipes With Counterfeit Chips Worth $2.7 Million"; and more.

Opening Bell

Opening Bell: 5.26.15

Vatican Bank makes it rain; "Is a 35-year-old mathematician the modern face of financial crime?"; Greece is still screwed; Wife bonus wives "panicked"; Cops chase student driver vehicle going 110 mph; and more.

Opening Bell

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

Opening Bell: 5.18.15

Greece is screwed; Puerto Rico is screwed; Hedge funds are screwed; "Parrot Won't Stop Cursing In Spanish"; and more.

Opening Bell

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Opening Bell

Opening Bell: 02.26.13

J.P. Morgan’s Investor Day: Cut That Headcount (Deal Journal) JP Morgan is looking to cut another $1 billion out of its expenses this year, including somewhere around 4,000 jobs, according to a new presentation...And that may not be all the cuts. In a separate presentation on the consumer bank and mortgage operations the bank expects to cut costs in mortgage banking by $3 billion over this year and next year and cut headcount there by between 13,000 and 15,000. Banks Face Hurdle In Libor Fight (WSJ) Next week, lawyers for Barclays PLC, Royal Bank of Scotland Group PLC, UBS AG and more than a dozen other banks still under investigation are expected to ask a federal-court judge to throw out many of the suits, which seek class-action status. The suits, filed in civil court in California and New York by plaintiffs ranging from a retired cable-car driver in San Francisco to the city of Baltimore, have been piling up for nearly two years. They seek damages that could reach into the tens of billions of dollars from financial institutions that help determine the London interbank offered rate, or Libor. Barclays, RBS and UBS already have paid about $2.5 billion, and admitted wrongdoing, to settle rate-rigging allegations by U.S. and U.K. regulators. In court filings, lawyers for the 16 banks accused of wrongdoing say the lawsuits have no legal validity. The lawyers say regulatory settlements reached so far don't support the central allegation in most of the civil suits that banks engaged in illegal, anticompetitive behavior. Berlusconi Concedes as He Weighs Alliance (Bloomberg) Former Italian Prime Minister Silvio Berlusconi acknowledged rival Pier Luigi Bersani’s narrow victory in the lower house of Parliament and said he’s open to a broad alliance to avoid a second election. “Everyone needs to think what good can be done for Italy and this will take some time,” Berlusconi said in an interview with Canale 5, a station owned by his Mediaset SpA broadcaster. The country can’t be left without a government, he said. Lew gettin’ close: Senate panel to OK as next Treasury boss (NYP) Treasury Secretary-nominee Jack Lew will get the green light to replace Tim Geithner despite taking heat during and after his confirmation hearing over a loan he received from New York University. The 57-year-old former White House chief of staff has enough votes from the Senate Finance Committee, headed by Max Baucus (D-Mont.), to pass a vote today that will likely lead to his confirmation, sources said. A full Senate vote is likely to be scheduled in a couple of days and held sometime next week. Larry Summers: Sequestration 'Meat Cleaver' Is Irresponsible (CNBC) Avoiding the "sequester" is "round three" in the debt-reduction debate, former Clinton Treasury Secretary Lawrence Summers told CNBC Tuesday, arguing for a "balanced approach" because President Barack Obama has agreed to more spending cuts than revenue during the process. In a "Squawk Box" interview, Summers said the funding constraints of the Budget Control Act of 2011 — which resolved that year's debt ceiling crisis — were round one. "You had spending cuts that were far larger from the discretionary side, that were far larger than anything [on revenue] that happened in December. Right now, we're way in balance toward more spending cuts." Dominique Strauss-Kahn seeks to ban 'half-man half-pig' book (Telegraph) The "biographical novel" by Marcela Iacub, a lawyer and journalist, recounts her seven-month affair with the 64-year-old Mr Strauss-Kahn last year. It is due to be published on Wednesday under the title, Belle et Bête, or Beauty and Beast. But the one-time Socialist presidential hopeful will this morning seek to have the book banned for "violation of the intimacy of private life" and the author and her publisher fined 100,000 euros (£88,000) in damages...In the work, she claims Mr Strauss-Kahn would have transformed the Elysée Palace into a "giant swingers' club" had he been elected French president. In fresh accounts by those who have read the book yesterday, the last chapter narrates the pair's final encounter, ending in Miss Iacub receiving treatment in casualty after "the pig" left her with an "eaten ear". Mr Strauss-Kahn has slammed the work of a woman who "seduces to write a book, claiming to have amorous feelings to exploit them for financial gain". Gupta's Gotta Pay GS $6.2 Million (NYP) Former Goldman Sachs director Rajat Gupta was ordered yesterday by a Manhattan federal judge to fork over a whopping $6.2 million to repay the Wall Street bank for legal fees it spent during the government’s probe of Gupta’s insider-trading case. The 64-year-old fallen star was convicted last year of giving up secrets he learned while on Goldman’s board to his pal and hedge fund honcho Raj Rajaratnam. Among the counts, the jury found Gupta guilty of giving Rajaratnam a tip on Warren Buffett’s $5 billion investment in Goldman in the throes of the financial crisis. Gupta, the former head of consulting firm McKinsey, is out on bail while he appeals the ruling. Goldman had requested restitution of $6.9 million — and submitted 542 pages of billing records from its lawyers at Sullivan Cromwell. Yahoo’s Mayer Risks Productivity With Work-From-Home Restriction (Bloomberg) Jackie Reses, Yahoo’s executive vice president of people and development, sent a memo last week asking employees with work-from-home arrangements to make their way to the company’s offices, starting June. “To become the absolute best place to work, communication and collaboration will be important, so we need to be working side-by-side,” according to the memo, whose contents were confirmed by a Yahoo employee who asked not to be identified because it’s not a public document. “Speed and quality are often sacrificed when we work from home.” At a time when Mayer is under pressure to jump-start growth and create innovative products, the shift may compromise Yahoo’s ability to attract employees seeking the freedom to work outside the office -- a perk offered by many of the company’s competitors. Research suggests that working from home enhances productivity, said Jody Thompson, co-founder of workforce consultant CultureRx. BP Oil-Spill Trial Begins (WSJ) Both Transocean and the Justice Department focused part of their opening statements on a 10-minute ship-to-shore phone call between two BP engineers, Donald Vidrine and Mark Hafle, less than an hour before the blast. From the rig, Mr. Vidrine allegedly talked about unusual results from a test designed to ensure the cement sealing in the bottom of the well was successful. Investigators later found that rig workers misinterpreted the results of the test. Dennis Rodman Bound For North Korea (Reuters) Retired U.S. basketball player Dennis Rodman is to visit North Korea to film a television documentary and will arrive in the capital Pyongyang on Tuesday, the Associated Press reported. Rodman, now 51 years old, won five NBA championships in his prime, achieving a mix of fame and notoriety for his on- and off-court antics. Thirty-year-old North Korean leader Kim Jong-un, who has launched two long-range rockets and carried out a nuclear weapons test during his first year in power, is reported to be an avid NBA fan and had pictures taken with players from the Chicago Bulls and Los Angeles Lakers during his school days in Switzerland. "At a time when tensions between the two countries (the United States and North Korea) are running high, it's important to keep lines of communication open, no matter how non-traditional those channels are," AP quoted Shane Smith, the founder of VICE, which is to make the TV series, as saying.