Opening Bell: 5.27.15

Greece not getting money any time soon; RBS will (probably) pay another $4.5 billion fine; FIFA arrests; Hank Greenberg; Activists v. Tech; "NYPD boss spent $60K on dance studio for cops"; and more.
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Greece Said Likely to Miss May Deal Deadline as Talks Go Nowhere (Bloomberg)
Greece is nowhere close to an agreement with the European Commission and International Monetary Fund over the terms of a continued bailout for the country, said the people, who asked not to be identified discussing private negotiations.

RBS Seen Facing $4.5 Billion Tab to Settle U.S. Mortgage Lawsuit (Bloomberg)
The FHFA, suing on behalf of government-owned lenders Fannie Mae and Freddie Mac, is seeking to add to more than $19 billion it’s already collected in settlements from 16 other banks. Edinburgh-based RBS has set aside about 2.1 billion pounds ($3.2 billion) to cover the cost of the lawsuit.

Tech Firms Seek Ways to Fend Off Activist Investors (WSJ)
Scott Kupor, a colleague of Mr. Andreessen’s at Andreessen Horowitz, says that some tech executives, fearful of being ousted by shareholders, are making short-term moves to boost share prices while neglecting broader technology shifts. The danger, Mr. Kupor says, is that shareholders “are left with a company that is a shell of its former self.” To forestall such outcomes, Mr. Andreessen urges startups to mimic Facebook and Google Inc. by granting founders special types of stock that give them control over key decisions. He says that tactic will insulate the companies from outside pressures after they are public. Many entrepreneurs are heeding the call. Seven of the 10 most-highly-valued, venture-backed private tech companies have multiple classes of stock, according to Fenwick & West LLP. The law firm says it agreed not to disclose the companies’ names as a condition of gathering the data.

FIFA Raided by Swiss Authorities in 2018, 2022 World Cup Probe (Bloomberg)
Swiss investigators have seized data from soccer governing body FIFA’s headquarters as part of a criminal probe into the controversial 2010 vote that delivered the next two World Cups to Russia and Qatar. The raid on the soccer body’s hilltop office in Zurich followed dawn arrests at a five-star hotel where FIFA’s ruling executive was based ahead of President Sepp Blatter’s re-election bid on Friday. The arrests were at the instruction of the U.S. Department of Justice which is probing corruption in soccer dating back 20 years. “The collection of relevant bank documents had already been ordered beforehand at various financial institutes in Switzerland,” the Swiss Attorney General’s office said in a statement on its website. “The files seized today and the collected bank documents will serve criminal proceedings both in Switzerland and abroad.”

NYPD boss spent $60K on dance studio for cops (NYP)
An NYPD boss dropped $60,000 to turn an old printing room at Police Headquarters into a Zumba dance studio — in a move that infuriated top cop Bill Bratton, police sources told The Post on Tuesday. It was just the latest oddball idea from Deputy Commissioner of Personnel Michael Julian, who lost his post in charge of training earlier this year for trying to arm cops with baby oil to deal with protesters and breath mints to clean up their foul language. To set up the Latin-dance-inspired fitness center, Julian had workers install workout mats and flat-screen TVs in basement room S66, the sources said. He was so proud of the setup that he gave Bratton a tour — but the commissioner ripped him for blowing the cash. “That’s not what I wanted!” snapped Bratton, who ordered the equipment torn out and had the room locked, the sources said.

David Petraeus is now being rolled out by private equity firm (DM)
The former US Army general pleaded guilty to mishandling classified information with his lover and biographer, but now mixes with wealth managers for rich families in hopes of getting them to invest with private equity firm KKR...'They didn’t really pitch products... they brought out General Petraeus,' Rockside Capital Partners' Matthew McCarthy told Bloomberg. McCarthy was flown from Ohio, where he manages the wealth of a family that founded a consumer-products company, to New York to meet the former general in an attempt to woo him. Petraus's turn as a star attraction from the private equity firm comes after he joined Kohlberg Kravis Roberts & Co. L.P. in the middle of his scandal in 2013, heading its Global Institute that had just been created.

Frenetic Trading of 3 Stocks Confounds Hong Kong Market (Dealbook)
Shares of Goldin Properties, which lost 40 percent last Thursday, were up 43 percent on Tuesday. Shares of a related company, Goldin Financial — which, like Goldin Properties, is controlled by the billionaire Pan Sutong — plunged more than 40 percent last Thursday. And a day before that, shares in the Hanergy Thin Film Power Group, a solar equipment manufacturer controlled by the Chinese billionaire Li Hejun, fell 47 percent before trading in the stock was suspended. All three companies have offered no explanation. Regulators, too, have been quiet.

The Wrath of Hank: Ex-AIG CEO Greenberg Won’t Give Up at Age 90 (Bloomberg)
Maurice “Hank” Greenberg spent some of his 90th birthday party like he’s spent much of the past decade: angry. As he addressed his family at a lunch at a private estate this month, one of his sons made another laugh. Then their sister cracked up. Greenberg told her to leave if she couldn’t keep it down. “It got held onto for the rest of the day, so that when we were leaving he still gave me grief about it,” his daughter, Cathleen London, a 52-year-old family physician, said a day later. “I said, ‘I’m sorry.’”

Woman Faces Bribery Charge For Lick Offer (TSG)
A Louisiana woman is facing a public bribery charge after allegedly making an indecent proposal to the cop who arrested her for pummeling her live-in boyfriend, according to court records. Diane Thomas, 52, was busted earlier this month for punching her beau in the face “multiple times” and scratching him with her fingernails during a confrontation in the couple’s Monroe home. When Thomas was read her Miranda rights by a Monroe Police Department officer, she stated that her boyfriend was a “bitch,” adding that he “got in her face so she beat his ass,” according to a May 16 probable cause affidavit. After Thomas was handcuffed, she told Corporal Chris Ballard that she could not go to jail since she “has a good job.” At that point, Thomas allegedly made Ballard an offer he would refuse. "If you won't take me to jail I will get on my knees right now," she reportedly declared. "Officer I will even lick your butt hole."

Related

Opening Bell: 4.17.15

Greece "is moving ever closer to the abyss"; Bloomberg terminals go down for hours; Hank Greenberg faces fraud trial; "Office manager at Bronx dental practice operated on patients behind real dentist's back"; and more.

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Opening Bell: 9.13.16

Wells Fargo CEO will face senate panel; Fed probably going to hold steady; Hank Greenberg gets his day in court; Catfish Falls From The Sky, Hits Woman In The Face; and more.

Opening Bell: 03.12.13

Apple To Announce Plans For Cash Hoard (WSJ) Apple will outline what it plans to do with a growing pile of cash by next month, according to Howard Ward, chief investment officer at Gamco Investors Inc. Apple, which has been grappling with investor criticism over the handling of its $137.1 billion in cash and investments, will add $42 billion in earnings to that sum in 2013, Ward said. Greenlight Capital Inc.’s David Einhorn has been urging Cupertino, California-based Apple to issue high-yielding preferred shares to spread the funds among investors. Investors are also urging Apple to consider a higher dividend payout. “We’re going to get an announcement from the company as to how they intend to reallocate some of their cash,” Ward said in an interview today on Bloomberg Radio’s “Surveillance” with Tom Keene. “They will put a floor under their stock at a higher price than it is today.” AIG shareholders win class-action status in lawsuit versus U.S. (Reuters) Two groups of American International Group shareholders won class-action status from a federal judge on Monday in a $25 billion lawsuit by former Chief Executive Maurice "Hank" Greenberg over alleged losses caused by the U.S. government's bailout of the insurer. U.S. Court of Federal Claims Judge Thomas Wheeler also appointed Greenberg's lawyer, David Boies, of Boies, Schiller & Flexner LLP, as lead counsel for the classes. Greenberg's Starr International Co, once AIG's largest shareholder with a 12 percent stake, sued the United States in 2011 over what eventually became a $182.3 billion bailout for the New York-based insurer. It said that by taking a 79.9 percent AIG stake and then conducting a reverse stock split without letting existing shareholders vote, the government conducted an illegal taking that violated the 5th Amendment of the U.S. Constitution. Citing Boies' estimate that "tens of thousands" of shareholders might be affected, Wheeler said "class certification is by far the most efficient method of adjudicating these claims." Both Sides Of SEC Nominee Face Heat (WSJ) In one version, Ms. White is a no-holds-barred crime fighter known for stretching the law to jail mob bosses and international terrorists. In another, Ms. White is a friend of Wall Street who worked for the past decade for the law firm Debevoise & Plimpton LLP, where she represented giant banks such as J.P. Morgan Chase. Blackstone: We're Betting Big On Residential Real Estate (CNBC) "Blackstone is now the largest owner of individual houses in the United States," Schwarzman told CNBC's "Squawk on the Street" Monday, pointing to his company's $3 billion portfolio of residential real estate. But given the nascent recovery in the housing market, they're not buying and selling them quickly but rather renting them out. "It's a good business for us. It's a new thing, but it's also good for America," he said. Icahn Gets Confidential Look At Feds Books (Reuters) Dell Inc has agreed to give Carl Icahn a closer look at its books, less than a week after the activist investor joined a growing chorus of opposition to founder Michael Dell's plan to take the world's No. 3 personal computer maker private...A source with knowledge of the situation said Icahn's and Dell's confidentiality agreement does not have a contractual "standstill" obligation - meaning he is not obligated to stop trading stock in the company. But the activist investor would not be able to trade the stock while he is privy to non-public information in any case, the source added. Phoenix society gives gator happier life with prosthesis (AZC) The alligator is Mr. Stubbs, who is part science project, part human endeavor, and much more. He’s also half-gator, half-rubber. The 11-year-old crocodilian now sports a 3-foot-long prosthetic tail, attached firmly with nylon straps. It replaces the original, which was bitten off more than eight years ago. As far as anyone at the Phoenix Herpetological Society knows, Mr. Stubbs is the first alligator to tolerate, if not sport, a prosthesis. It will take months, however, before Mr. Stubbs learns how to properly use the tail. For now, handlers are happy with smaller milestones. “The fact he doesn’t try to bite it (the tail) is a good sign,” said Russ Johnson, president of the Phoenix Herpetological Society. “Learning how to use it is going to take a lot of training.” The months-long project was overseen by someone well-versed in anatomy. Marc Jacofsky is executive vice president of research and development at the CORE Institute in Phoenix, which specializes in orthopedic care — for humans. While visiting the Herpetological Society, Jacofsky was asked if it would be possible to make an artificial tail for Mr. Stubbs. “I looked and saw there was enough there that we could probably do something that wouldn’t involve surgery,” Jacofsky said. “I also liked the idea because it would improve his life. Our motto at the CORE Institute is ‘Keep life in motion,’ and this certainly fit in with that. I was on board.” Jacofsky estimated the project has cost the Core Institute about $6,000 in donated labor and materials. Mr. Stubbs had been a project since shortly after arriving at the center in May 2005. The then-3-year-old gator was one of 32 confiscated from the back of a truck pulled over near Casa Grande, Johnson said. Officers called in the Arizona Game and Fish Department as soon as the cargo made its presence known. “Scared the heck out of the officer,” Johnson said. “No one expects to find alligators when you look into the back of a truck.” Greece Faces 150,000 Job-Cut Hurdle to Aid Payment (Bloomberg) Greece is locked in talks with international creditors in Athens about shrinking the government workforce by enough to keep bailout payments flowing. Identifying redundant positions and putting in place a system that will lead to mandatory exits for about 150,000 civil servants by 2015 is a so-called milestone that will determine whether the country gets a 2.8 billion-euro ($3.6 billion) aid instalment due this month. More than a week of talks on that has so far failed to clinch an agreement. Failed Sale Of Gleacher Is A Warning For Directors (WSJ) The Dell drama is still unfolding, but for a cautionary tale of how boards, even when they may be well-intentioned, can harm investors of a takeover target, take Gleacher. Shares in the small investment bank have lost more than 60% in the past year as the prospects for a deal evaporated, business dwindled and star traders left. Ironically for a firm that bears the name of Eric Gleacher, who made his name advising on big deals in the 1980s, the company failed to sell itself. At least as some critics see it, its independent directors are to blame. SEC Says Illinois Hid Pension Troubles (WSJ) For years, Illinois officials misled investors and shortchanged the state pension system, leaving future generations of taxpayers to foot the bill, U.S. securities regulators allege. The Securities and Exchange Commission on Monday charged Illinois with securities fraud, marking only the second time the agency has filed civil-fraud charges against a state. Bernanke Provokes Mystery Over Fed Stimulus Exit (Bloomberg) When Ben S. Bernanke asserted last month that the Federal Reserve doesn’t ever have to sell assets, he raised questions about how the central bank can withdraw its record monetary stimulus without stoking inflation. The Fed may decide to hold the bonds on its balance sheet to maturity as part of a review of the exit strategy Bernanke expects will be done “sometime soon,” he told lawmakers in Washington on Feb. 27. This would help address concerns that dumping assets on the market will lead to a rapid rise in borrowing costs. It also allows the Fed to avoid realizing losses on its bond holdings as interest rates climb. Man shot in buttocks at Calle Ocho Festival unaware he was wounded (Miami Herald) The shooting occurred around 4:30 p.m. as the man walked along Southwest Eighth Street and 11th Avenue, part of the throng of revelers who gather annually at the street festival in Little Havana. It’s unclear if something sparked the violence between the two men, or if the shooting was unprovoked. At first the victim did not realize he had been shot and kept strolling along the festival route. “He discovered later that he was bleeding and then passed out,” said Miami police spokesman Sgt. Freddie Cruz. The victim, who was hit in the left buttocks, was taken to Jackson Memorial Hospital, where he is in stable condition and expected to recover.

Opening Bell: 03.02.11

Financial Crisis Amnesia (WSJ) Tim Geithner: "My wife occasionally looks up from the newspaper with bewilderment while reading another story about people in the financial world or their lobbyists complaining about Wall Street reform or claiming they didn't need the Troubled Asset Relief Program. She reminds me of the panicked calls she answered for me at home late at night or early in the morning in 2008 from the then-giants of our financial system. We cannot afford to forget the lessons of the crisis and the damage it caused to millions of Americans. Amnesia is what causes financial crises. These reforms are worth fighting to preserve." IMF Says Threat Of Sharp Global Slowdown Has Eased (Reuters) So that's nice. Life as Libor Traders Knew It Seen as Abusive by Investigators (Bloomberg) Regulators probing the alleged manipulation of global interest rates are focusing on what traders involved in setting the benchmark say were routine discussions condoned by their superiors...“A few hundred people, mostly based in one city and sitting in close proximity to each other, set an index rate for trillions of dollars of securities with little or no oversight,” said Mark Sunshine, chief executive officer and chairman of Veritas Financial Partners, a Florida-based firm that provides loans to businesses and real estate companies. “That cannot continue. The mechanism itself, the oversight and the penalties if violated, are woefully inadequate.” Twitter's Slow Road To IPO (WSJ) In just six years Twitter Inc. has become the world's digital soapbox, amassing more than 100 million monthly users—from everyday people to Lady Gaga to Middle East protesters—who use the service to spread pithy updates and breaking news. Yet despite the service's growing influence on society and culture, the business behind it still has a ways to go until it's ready for an initial public offering. To understand why, travel to Cincinnati, where last June Twitter planted a staffer blocks from Procter & Gamble Co.'s headquarters and assigned him a critical task: Teach the country's biggest advertiser to use Twitter and buy its ads. But when P&G spent $150 million to promote the launch last month of a Tide laundry detergent, the company bought magazine pages, billboard spots and television commercials during the Academy Awards—and no Twitter ads. "All [P&G] brands are asking questions about what to do with Twitter and how to leverage it; nobody really had a clear, lean answer," said the staffer, J.B. Kropp. US Seeks Dismissal Of Lawsuit On AIG Takeover (Reuters) In November, Hank Greenberg's company, Starr International Co, sued the U.S. government for $25 billion, calling the 2008 federal takeover of the insurer unconstitutional. Starr sued the government in the U.S. Court of Federal Claims in Washington, D.C., which handles lawsuits seeking money from the government. It brought that lawsuit on behalf of itself and other AIG shareholders...In a filing with the U.S. Court of Federal Claims in Washington, D.C., on Thursday, the government said although Starr may disagree with the terms to which AIG agreed, any loss resulting from that agreement should be borne by AIG and its shareholders, and not the public. Obama Back On Wall Street (Politico Morning Money) Obama raised just north of $5 million for his re-election campaign and the DNC at four events in NYC last night including a swank dinner ($35,800 per person, $71,600 per couple) at Jean-Georges Vongerichten’s ABC Kitchen on East 18th Street. The dinner, the first Wall Street-heavy event since Obama doubled down on his proposed bank tax, was hosted by a handful of the President’s stalwart industry supporters including Robert Wolf, Blair Effron, Mark Gallogly, Marc Lasry and Orin Kramer. Sex Work Among Medical Students On the Rise? (ABC) Sex work among medical students is on the rise, claims a new editorial, published in the journal Student BMJ. The UK-based publication noted that students are likely seeking extreme measures to deal with their financial hardship. One in 10 students knows of another who participated in prostitution to pay their medical student loans, according to the editorial. "Mounting evidence suggests that more university students are engaging in prostitution as a means to pay increasing tuition fees, growing debts, and high living costs," Jodi Dixon, the author of the editorial, wrote. "With escalating debts, students in the United Kingdom may view prostitution as an easy way to get rich quick." Greek Swaps Headed Back to ISDA Committee (Bloomberg) Holders of credit-default swaps on Greek bonds shouldn’t tear up their contracts after yesterday’s ruling against a payout. The International Swaps & Derivatives Association said the swaps hadn’t been triggered by the European Central Bank’s exchange of Greek bonds for new securities exempt from losses taken by private investors. The group will now probably be asked to determine whether collective action clauses, or CACS, being used by Greece to impel investors to participate in a wider exchange of bonds that would trigger the swaps. Madoff moneyman Merkin near $400M AG deal (NYP) After a bitter three-year legal battle, Ezra Merkin, the Manhattan moneyman who funneled more than $2 billion to convicted Ponzi king Bernie Madoff, is nearing a settlement with the New York attorney general that could have him shell out as much as $400 million. Sources said the settlement with AG Eric Schneiderman would recover the bulk of the $470 million in fees the notorious middleman pocketed from investing his clients’ cash with Madoff. Game Changer For Zynga: No Facebook (WSJ) The San Francisco-based company, whose offerings have long been associated with Facebook as well as apps for mobile devices such as Apple Inc.'s iPhone, said a "beta," or prerelease version of what it calls the Zynga Platform, will initially allow customers to play five of its popular titles—"CityVille," "Hidden Chronicles," "Zynga Poker," "CastleVille" and "Words With Friends"—from its website. Zynga said more of its games will become available on the website over time. Cops Ticket Woman For Resting Injured Leg On Seat In Deserted Subway Train (Gothamist) Brooklyn resident Kate Wilson was riding the D train home to Sunset Park around 1 a.m. one morning in February when several police officers entered her subway car at 36th street. The subway car was mostly empty, with plenty of empty seats, and Wilson was resting her right leg—which she had injured in a race that day—on a corner of one seat. What followed was an absurd yet all too familiar encounter with overzealous, quota-filling transit cops and ended with a $50 summons.

Opening Bell: 09.05.12

ECB Plan Said To Pledge Unlimited, Sterilized Bond-Buying (Bloomberg) Under the blueprint, which may be called “Monetary Outright Transactions,” the ECB would refrain from setting a public cap on yields, according to the people, and a third official, who spoke on condition of anonymity. The plan will only focus on government bonds rather than a broader range of assets and will target short-dated maturities of up to about three years, two of the people said. Facebook Plays Defense (WSJ) In a regulatory filing Tuesday, Facebook said Chief Executive Mark Zuckerberg won't sell any stock in the company for a year, and that two of its directors—Marc Andreessen and Donald Graham—have no plans to sell their personal holdings beyond the amount needed to cover their tax liabilities. Facebook also detailed how it will essentially buy back 101 million shares when it issues previously restricted stock units to its staff in October. At recent prices, it would spend roughly $1.9 billion to keep those shares off the market. Spain Seeks To Stem Bank Crisis (WSJ) It's on the to-do list. Banks Faces Suits As States Weigh Libor Losses (NYT) The scandal over global interest rates has state officials like Janet Cowell of North Carolina working intensely behind the scenes to build a case for suing the nation’s largest banks. Ms. Cowell, the state’s elected treasurer, and several of her staff members have spent the summer combing through the state’s investments trying to determine how much the state may have lost because of suspected manipulation of Libor. “We think this could be as big as the mortgage crisis settlement, that this could be a really high impact situation and that we should be aggressive on this,” Ms. Cowell said, referring to the $25 billion settlement that the nation’s biggest banks entered with state attorneys general. Socialite In Traffic Bust On LI (NYP) Lisa Falcone leaded with the owner of the Mercedes she hit, Bob Cohen, and Verizon worker Fred Ledermann not to call police, “saying her husband would pay for everything,” the witness said. But Ledermann did call. soon arrived and shouted at cops to wait for a tow truck. A Southampton Town officer got so fed up with the billionaire’s bellowing that he ordered him to the side of the road and called for backup, the witness added. Because she smelled of alcohol and was staggering, the officer asked Lisa Falcone to take a Breathalyzer, according to a police report. From the side of the road, her still-simmering husband yelled, “Don’t take it!’’ When the cop threatened to arrest her because of the refusal, Phil changed his advice to “Take it! Take it!’’ according to the witness. SEC Charges China Firm With Falsifying Earnings (WSJ) The U.S. Securities and Exchange Commission charged China Sky One Medical Inc. with falsely inflating its earnings, a rare action by the regulator almost two years after doubts about the accuracy of disclosures by small Chinese firms sent U.S. investors fleeing their stocks. In a statement published on its website Tuesday, the SEC said that Sky One Medical, which makes Chinese medicine and was once listed on the Nasdaq Stock Market, created about $19.8 million worth of phony export sales over the course of 2007 and 2008. Lehman’s Detroit Escape Means 90% Loss On Properties (Bloomberg) Lehman Brothers Holdings Inc. has said it plans to be patient in selling real estate holdings four years after filing the largest U.S. bankruptcy in history. In Detroit, it’s willing to accept less than 10 cents on the dollar to get out while it can. Lehman is selling a 251,000-square-foot (23,000-square- meter) office property in suburban Farmington Hills. In June, the bank offered it at auction for $10 a square foot, which would have recovered less than 10 percent of the $27.5 million mortgage it extended in 2007. It’s also selling 1 Woodward Ave., a tower overlooking the city’s riverfront and border with Canada that’s 44 percent vacant. Gross: Fed Is Harming, Not Helping Economy (CNBC) In his latest investment outlook, the co-chief investment officer of Pimco said the level of "carry" or spreads that banks and investors can make has fallen to such lows that it was now hurting investments, exacerbating the deleveraging process already underway in the economy. “A lender will not easily lend money to an obese over-indebted borrower — that much is clear — but she will also not extend a check when the yield, carry and return on investment is so low that it cannot compensate for historic business model overheads," Gross said.

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.

Opening Bell: 01.08.13

Obama Said Close to Choosing Lew for Treasury Secretary (Bloomberg) President Barack Obama may choose White House Chief of Staff Jack Lew to replace Treasury Secretary Timothy F. Geithner as soon as this week, according to two people familiar with the matter. The selection of Lew would trigger a White House shuffle for Obama’s second term as he replaces his chief of staff and moves senior aides into new roles, said the people, who requested anonymity to discuss personnel matters. While Obama hasn’t made a final decision to pick Lew, the president’s staff has been instructed to prepare for his nomination, said one of the people. Rescued by a Bailout, AIG May Sue Its Savior (NYT) The board of A.I.G. will meet on Wednesday to consider joining a $25 billion shareholder lawsuit against the government, court records show. The lawsuit does not argue that government help was not needed. It contends that the onerous nature of the rescue — the taking of what became a 92 percent stake in the company, the deal's high interest rates and the funneling of billions to the insurer's Wall Street clients — deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for "public use, without just compensation." Greenberg: 'Cadre' Hurt AIG (NYP) Maurice “Hank” Greenberg, former chief executive officer of American International Group, says in a soon-to-be-published book that the company was almost destroyed by overzealous overseers. The insurer was “ultimately taken over and run aground by a cadre of auditors, lawyers, outside directors, and government officials,” according to an excerpt of “The AIG Story” on Amazon.com’s website. JPMorgan’s Staley Quits to Join BlueMountain Hedge Fund (Bloomberg) ames E. Staley, the JPMorgan Chase executive who was once seen as a possible candidate to become chief executive officer, quit to join BlueMountain Capital Management LLC, a $12 billion hedge fund with close ties to the New York bank. Staley, who was at JPMorgan for more than 34 years, most recently as chairman of the corporate and investment bank, will become a managing partner and purchase a stake in BlueMountain, the New York-based firm said today in a statement. Proceeds from the stake sale will be invested in new infrastructure, technology and people, the firm said. “I’m very excited to be joining BlueMountain at a time when sea changes in the financial industry combined with the firm’s unique strengths open up enormous possibilities to deliver value to clients,” Staley, 56, said in the statement. HSBC N.J. Client Admits Conspiracy in Offshore Tax Case (Bloomberg) A New Jersey client of HSBC Holdings pleaded guilty to charges that he hid as much as $4.7 million through Swiss and Indian accounts not declared to the U.S. Internal Revenue Service. Sanjay Sethi, 52, who owns SanVision Technology Inc., conspired with HSBC bankers in New York, London and Geneva to hide assets from the IRS, he admitted yesterday in federal court in Newark, New Jersey. Sethi will pay a $2.37 million penalty for failing to file reports required for foreign accounts. “Sethi and his co-conspirators used nominee and shell companies formed in tax-haven jurisdictions and elsewhere to conceal the defendant’s ownership and control of assets and income from the IRS,” according to his charging document. Bill Ackman Says Just Getting Started Exposing Herbalife (Bloomberg) “We’re prepared to spend whatever it costs and do whatever is required to make sure that the world understands the facts about this company,” he said in a telephone interview. “We can’t imagine how the SEC or the Federal Trade Commission or any other relevant regulator will ignore what we have said.” Ackman said he would make all his information available to U.S. regulators. Chinese Tech Titans Eye Brazil (WSJ) The Chinese like emerging markets because, for a change, they don't have to start way behind established American companies. By moving into Brazil aggressively, Chinese PC maker Lenovo Group and Internet-search company Baidu hope to gain an edge over companies like Hewlett-Packard and Google In addition, some U.S. companies that are leaders at home and in Europe have a smaller footprint here because of Brazil's long history of protectionism and red tape and its high cost of labor, particularly compared with Asia. Oregon brewer Daniel Keeton creates nutritional, non-alcoholic brew for his dog (NYDN) Oregon man Daniel Keeton enjoys serving beer to customers at the brewery he works for, so why shouldn't he serve up some healthy brew for the dog he cares about? The dog brew is non-alcoholic of course, but it is a big hit with Keeton's canine Lola Jane. And now Keeton's special brew is available to anyone who wants it. After years of planning, Keeton launched his company Dawg Grog over the summer. Keeton, who works at Boneyard Brewery in Bend, says Dawg Grog is good for the dogs, and they can't seem to get enough of it. "Bend is a dog-loving community and a beer-loving community," Keeton told the Daily News on Monday. "I wanted to marry those two together in some way." Keeton spent years refining the ingredients to his special brew, which includes low-sodium vegetable broth, water and spent grain from Boneyard Brewery. "After a couple of years of trying recipes I came up with one that I am really happy with, and one that my dog is really happy with," he said. Secret Goldman Team Sidesteps Volcker After Blankfein Vow (Bloomberg) MSI wagers about $1 billion of the New York-based firm’s own funds on the stocks and bonds of companies, including a mortgage servicer and a cement producer, according to interviews with more than 20 people who worked for and with the group, some as recently as last year. The unit, headed by two 1999 Princeton University classmates, has no clients, the people said...The team of about a dozen people, based at the firm’s Manhattan headquarters, is headed by Daniel Oneglia and Geoff Adamson. Oneglia was treasurer of the Princeton eating club Tiger Inn, where his nicknames included “the Don” and “the Weasel,” according to the university’s website. Adamson was coxswain for men’s heavyweight varsity crew. A Boston Globe photo shows teammates flinging him into a Massachusetts lake after a victory. Carlyle Bags $4 Billion Profit From China Insurance Exit (Reuters) Private equity firm Carlyle Group sold its remaining stake in China's No.3 insurer CPIC in a deal valued at $793 million, exiting the business with its largest dollar profit on an investment. After several stake sales in the past two years, Carlyle will finish with a total profit of more than $4 billion, five times the $800 million it invested in CPIC between 2005 and 2007 for a 17 percent stake, Thomson Reuters calculations show. By private equity standards, where making two times cash paid and a few hundred million is considered a success, the CPIC exit is an historic deal for Carlyle. London Quantitative Hedge Funds Report Second Year of Losses (Bloomberg) The performance of the funds belies their popularity with investors, who’ve poured $108.2 billion into the pools since the end of 2008, according to Fairfield, Iowa-based BarclayHedge Ltd. While quants made money during the financial crisis when other hedge funds didn’t, they’ve since stumbled as market sentiment swung from optimism to pessimism following political announcements in Washington and Brussels, breaking up the trends they try to follow. That may force investors to withdraw money. Japan Executives Warn Yen May Get Too Weak (WSJ) The executives, who gathered at an annual New Year's reception held by Japan's three biggest corporate lobbies, praised Prime Minister Shinzo Abe's new government for its proposals to boost the economy and tame the strong yen, which erodes exporters' profits and makes it harder to sell Japan-made goods overseas. But they also cautioned that if the economy stays weak, or if the government doesn't take steps to get its bloated finances under control, investors could lose confidence in Japan and flee, sending the yen into free fall. KFC diner stumbles upon strange brain-like organ in his meal (TS) Disgusted Ibrahim Langoo was tucking into a Gladiator box meal when he spotted what he thought was a “wrinkled brain” inside a piece of chicken. KFC have apologised and, after having the photographs analysed, reckon the unsightly organ may in fact be a kidney. The 19-year-old took a photograph of the three-inch stomach-churning discovery on his mobile phone and complained to staff. Apologetic bosses at the fast-food chain – known for its Finger Lickin’ Good slogan – have now offered him vouchers for even more KFC meals.