Opening Bell: 7.24.15

Hedge fund's bet on Obamacare pays off; China wants lots of Silicon Valleys; Banks probed re: FIFA; "Brave topless models defend First Amendment at courthouse"; and more.

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Dealbreaker

Fund Boss’s Gamble on Health Law Pays Off Big (WSJ)
Glenview Capital Management LLC made a bold decision when President Barack Obama’s health-care overhaul was rolling out: Bet on it. The result has been one of the most successful hedge-fund wagers in recent years. New York-based Glenview has realized and paper gains of more than $3.2 billion since it started making investments in hospitals and insurers four years ago, according to a Wall Street Journal analysis of securities filings...Its latest win comes courtesy of Anthem Inc., the nation’s second-largest health insurer by revenue, which is expected to announce a $48 billion-plus acquisition of rival Cigna Corp. as early as Friday, according to people familiar with the matter. Glenview owns shares in both companies, as well as in insurers Aetna Inc. and Humana Inc., which struck a $34 billion deal of their own three weeks ago. Shares of all four companies have rallied in anticipation of tie-ups.

U.S. Authorities Probe Banks’ Handling of FIFA Funds (WSJ)
The previously undisclosed scrutiny represents a new prong of the corruption case, which has roiled the International Federation of Association Football, known as FIFA. The probes also create the potential for new headaches for the financial industry over its money-laundering controls, which are increasingly under the regulatory microscope. Prosecutors have questioned HSBC Holdings PLC, Standard Chartered PLC and Delta National Bank and Trust Company, according to the people. At least three other major international banks have been contacted in the probe, the people said.

Blackstone C.F.O. Is Said to Be Headed to Airbnb (Dealbook)
Airbnb, the highly valued house rental start-up, is currently in talks with a top executive at the investment firm Blackstone Group, Laurence A. Tosi, to be its chief financial officer, according to a person briefed on the matter.

China Wants Silicon Valleys Everywhere (Bloomberg)
City officials in Changsha, capital of Hunan province, are doing their best to nurture their own Silicon Valley. Changsha’s high-tech zone is 15 times the size of New York’s Central Park. The city wants to lure companies that focus on new materials, software development, electronics manufacturing, and mobile apps.

50 Cent’s accountant has no idea how much money he has (NYP)
The bean counter, Mai Pho, was testifying in the punitive phase of a lawsuit brought by the baby mama of the rapper’s rival Rick Ross. The woman, Lastonia Leviston, already won a $5 million verdict against the rapper, whose real name is Curtis Jackson, after jurors found he violated her privacy by posting her private sex-tape video online. Pho provided information about Jackson’s net worth so jurors in Manhattan Supreme Court could determine how much to charge as punishment for posting the film. But the California accountant — who has never actually met her famous client — was accused of leaving major assets off Jackson’s balance sheet, including $29 million he lent to companies he controls. “Was the $29 million on your list?” Leviston’s lawyer, Philip Freidin, asked Pho, noting that he found the figure on the rapper’s subpoenaed tax returns. “No,” she admitted, referencing a list of assets and liabilities she wrote that puts Jackson’s net worth at $4.4 million. Forbes magazine says it’s closer to $155 million.

Billionaire Thomas Peterffy Is Listing Greenwich Estate for $65 Million (NYT)
Hungary-born billionaire Thomas Peterffy , a pioneer of computerized stock trading, is listing his 80-acre estate in Greenwich, Conn. for $65 million. Mr. Peterffy’s house and most of the outbuildings were originally built in the early 1900s as part of a country estate. The main house measures about 8,000 square feet, with eight bedrooms and eight bathrooms.

Trump Says He’s With the GOP, for Now (WSJ)
Mr. Trump hasn’t ruled out taking his White House run independent. Last weekend in Ames, Iowa, he said he wouldn’t rule out the possibility. And in an interview with the Hill newspaper published Thursday, Mr. Trump threatened to go on his own if he feels mistreated by the GOP, which has condemned his recent belittling of Sen. John McCain’s war record.

Financial Times to be sold to Japan’s Nikkei in $1.3B deal (NYP)
Nikkei, the Japanese media company, swooped in on Thursday to buy the Financial Times — the 131-year- old newspaper recognized in part by the pink paper it is printed on — for $1.3 billion. The deal is said to be an eye-popping 35 times the operating profit of the Financial Times Group. The pricey deal does not include FT’s 50-percent stake in The Economist.

Brave topless models defend First Amendment at courthouse (NYP)
A photographer facing a $1.1 million lawsuit for snapping pics of a shirtless model atop the Empire State Building staged a semi-naked photo shoot outside Manhattan Supreme Court Thursday afternoon in protest. “I’m getting sued for a million dollars, I don’t give a s–t,” said Allen Henson, 30, an Iraqi war veteran turned professional photographer. “I’m not intimidated,” he added. “They’re going to lose and I’m going to have a blast doing it!” Five models struck bare-breasted poses on the courthouse steps, as about 50 passers-by stopped to gawk...The models next bared it all in the lobby of 80 Centre St., the courthouse where Henson’s civil trial will resume August 6. Henson only squeezed off a few snaps before security put the kibosh on the stunt. “I thought I was going to be tased,” said the photog.

Opening Bell

Stress tests; The next Silicon Valley; Why you should lease a Rolls-Royce ; Emu on the loose; AND MORE.

Opening Bell

Diamond Censured Over Evidence in Barclays Libor Probe (Bloomberg) Barclays ex-Chief Executive Officer Robert Diamond was criticized for giving “unforthcoming and highly selective” evidence by a U.K. parliamentary report that faulted the bank for letting traders rig interest rates. The “candor and frankness” of Diamond’s testimony to lawmakers on July 4 “fell well short of the standard that Parliament expects,” the House of Commons Treasury Committee said in a 122-page report today following its inquiry into the bank’s attempts to manipulate the London interbank offered rate. “The Barclays board has presided over a deeply flawed culture,” the panel of British lawmakers said. “Senior management should have known earlier and acted earlier.” Bob Diamond Hits Bank In Rate-Rigging Row (Telegraph) In a statement Mr Diamond hit back at the report. "I am disappointed by, and strongly disagree with, several statements by the Treasury Select Committee,” Diamond said. Deutsche Bank’s Business With Sanctioned Nations Under Scrutiny (NYT) Federal and state prosecutors are investigating Deutsche Bank and several other global banks over accusations that they funneled billions of dollars through their American branches for Iran, Sudan and other sanctioned nations, according to law enforcement officials with knowledge of the cases. JPMorgan Picks Leader For 'Whale' Probe (WSJ) JPMorgan directors have named Lee Raymond chairman of a board committee investigating the bank's multibillion-dollar trading blunder, said people close to the probe. Some Groupon Investors Give Up (WSJ) Some of the early backers of Groupon, including Silicon Valley veteran Marc Andreessen, are heading for the exits, joining investors who have lost faith in companies that had been expected to drive a new Internet boom. At least four Groupon investors who held stock in the daily-deals company before it went public have sold or significantly pared back their holdings in recent months. Since its initial public offering in November, Groupon has shed more than three-quarters of its stock-market value, or about $10 billion...Mr. Andreessen, who rode the 1990s dot-com frenzy to riches at Netscape Communications Corp., was among the investors who helped fuel Groupon's rapid ascent. His firm, Andreessen Horowitz, was responsible for $40 million of the $950 million investors put into Groupon just months before the company's IPO. Andreessen Horowitz sold its 5.1 million Groupon shares shortly after restrictions on selling the stock expired June 1, according to people with knowledge of the transaction. Facebook Investors Brace For More Shares Coming To Market (Bloomberg) While Facebook Chief Executive Officer Mark Zuckerberg operates the world’s largest social-networking service, he’s facing investor concerns about how it can generate more revenue from its growing user base. That, plus the end of the first lock-up, drove the shares to half the offering price of $38, wiping out almost $46 billion in market value. Queen's corgis 'attack' Princess Beatrice's terrier Max (Telegraph) They may be among the Queen's favourite subjects but her corgis are in the doghouse after getting into a fight with one of Princess Beatrice's pets. Max, an 11–year–old Norfolk terrier, is said to have been badly injured after a "nasty" encounter at Balmoral castle last week. The Princess's pet nearly lost an ear and suffered several bloody bite injuries that had to be treated by a vet, in the latest in a series of scraps between royal dogs..."The Queen's dog boy was taking the corgis for a walk and they were joined by the Norfolk terriers, which came with Prince Andrew," one insider told a Sunday newspaper. "They were being taken along the long corridor leading to the Tower Door before being let into the grounds for a walk, and they all became overexcited. They began fighting among themselves and unfortunately the dog boy lost control. "The next thing we knew there were horrific yelps and screams...there was blood everywhere." EU Leaders Plan Shuttle Talks To Bolster Greece, Sovereign Bonds (Bloomberg) The sovereign-debt crisis mustn’t become a “bottomless pit” for Germany, even though Europe’s biggest economy would pay the highest price in a breakup of the euro region, German Finance Minister Wolfgang Schaeuble said on Aug. 18 during his ministry’s open day in Berlin. “There are limits,” he said, as he ruled out another aid program for Greece. Hedge 'A-Listers' Include Ackman, Loeb, Chanos (NYP) Influential adviser Cliffwater LLC — which monitors some 1,500 hedge funds and ranks them with an A, B or C grade — keeps a closely guarded list of 90 or so top-rated funds...Cliffwater advises large pension funds in New Jersey, Wisconsin and Massachusetts, among others, and has become one of the industry’s hottest gatekeepers as more big institutions invest directly in hedge funds rather than through funds of funds...An August copy of Cliffwater’s “500 top-rated A or B” funds shows that the company gives high marks to activist funds such as Ackman’s Pershing Square and also to tail risk funds, which aim to protect against disasters. Tucked inside the protected internal document, which compares five-year historical returns to risk, is Cliffwater’s “Select List,” which appears to be the 95 funds deemed worthy of A ratings. Along with Ackman, Dan Loeb of Third Point, the hedgie who recently rattled Yahoo!, famed short-seller Jim Chanos of Kynikos Associates and gold hound James Melcher of Balestra Capital, made the short list as well. Spitzer Defends Wall Street Legacy (FT) Last week it emerged that Goldman Sachs had brought the curtains down on its Hudson Street platform, one of the most high-profile independent research projects started by an investment bank involved in the settlement. Other settlement banks, such as UBS and Bank of America Merrill Lynch, are said to have closed or scaled down their own independent analysis projects. Mr. Spitzer was quick to defend the legacy of the global settlement in an interview with the Financial Times. “I think we accomplished something,” Mr. Spitzer said. “There are a lot of independent research firms out there, some doing well and others not. Goldman has other business models and other priorities.” Shia LaBeouf To Have Sex "For Real" While Filming Scenes For Lars Von Trier's "Nymphomaniac" (Complex) "It is what you think it is. There's a disclaimer at the top of the script that basically says, we're doing [the sex] for real. And anything that is 'illegal' will be shot in blurred images. But other than that, everything is happening," LaBeouf said during an interview.

Opening Bell

Warren Buffett wrote a thing; Silicon Valley is foisting creativity on everyone; getting hit in the balls is an art form; and more.

Opening Bell

Ex-Barclays employees tell jury of ‘humiliation’ and pressure; Silicon Valley not feeling Trump; 'Selfie Statue' sparks fury; and more.

Opening Bell

Bond buyers can't help themselves; Silicon Valley mocks Trump; Walmart Theft Suspect Told Cops She Was "Too Lazy" To Pay For Stolen Sex Toys; and more.

Opening Bell

Twitter hedge fund; Silicon Valley Bank; Bonuses; "April Fools' Day prank gone wrong burns Michigan apartment"; and more.

Opening Bell

Trump "smitten" with Gary Cohn; Ubers gonna Uber; Silicon Valley techies use their iPhones to schedule sex; and more.

Opening Bell

Obama Wins Re-Election With Romney Defeated In Key States (Bloomberg) Obama defeated Republican Mitt Romney, winning at least 303 electoral votes in yesterday’s election with 270 needed for the victory. With one state -- Florida -- yet to be decided, Romney had 206 electoral votes...Obama won the battleground states of Ohio, Virginia, Iowa, New Hampshire, Wisconsin, Nevada and Colorado. He also carried Pennsylvania, where Romney made an 11th-hour bid for support to try to derail the president’s drive for re-election. North Carolina was the only battleground Romney won. Romney Campaigns To The End (WSJ) Hours before Mitt Romney lost his six-year quest to win the presidency, he said he had prepared only one speech—a victory speech...Until the final hour, Mr. Romney and his aides expressed confidence that he would win. The candidate, who prefers data and metrics to chitchat, appeared to be caught off guard by the loss even though he trailed in polls in crucial battlegrounds such as Ohio. Triumph Of The Nerds: Nate Silver Wins In 50 States (Mashable) The Fivethirtyeight.com analyst, despite being pilloried by the pundits, outdid even his 2008 prediction. In that year, his mathematical model correctly called 49 out of 50 states, missing only Indiana (which went to Obama by 0.1%.) This year, according to all projections, Silver’s model has correctly predicted 50 out of 50 states. A last-minute flip for Florida, which finally went blue in Silver’s prediction on Monday night, helped him to a perfect game. Loser Ryan Also A Winner (NYP) The Republican vice-presidential hopeful hedged his bet by running for re-election to his congressional seat in Wisconsin — where last night, he was declared the winner for an eighth straight time. Goldman Partners Pocket $22 Million (WSJ) More than 30 executives, including Chief Executive Officer Lloyd C. Blankfein, recently cashed in stock options awarded in the afterglow of the company's initial public offering in 1999. According to a securities filing, the executives, all Goldman partners, pocketed a total of $21.8 million by exercising options and selling the underlying shares in the three days after the firm reported third-quarter results in mid-October. The options expire at the end of November, and cashing in produced instant profits because Goldman's share price is more than 50% higher than when the options were awarded in 2002. "By exercising 10-year-old options before they expired later this year, executives captured some of the value we have built for shareholders over that period," said a spokesman for the securities firm. In contrast, many of the executives' remaining options are worthless, at least for now, because they were granted from 2005 to 2008. The stock peaked in October 2007 at about $239, or 89% higher than Tuesday's closing price of $126.25 in New York Stock Exchange composite trading at 4 p.m. The biggest gain went to Michael S. Sherwood, a Goldman vice chairman and the firm's top executive in Europe, who received $5.2 million from exercising options on 115,211 shares. Mr. Blankfein collected $3.1 million, while departing Chief Financial Officer David A. Viniar got $2.3 million, the filing shows. JPMorgan Nears SEC Settlement (WSJ) JPMorgan is close to a settlement with the Securities and Exchange Commission that would end one probe into how the company's Bear Stearns Cos. unit packaged and sold home loans to investors, according to people familiar with the case. A pact with the nation's largest bank by assets would be the first tangible victory in a wide-ranging SEC investigation into Wall Street's sale of mortgage-backed securities before the onset of the financial crisis. Since 2010, the SEC has issued more than 300 subpoenas or document requests related to the probe and collected more than 30 million pages of documents, enforcement chief Robert Khuzami said earlier this year. BNP Paribas Third Quarter Net Doubles On Trading Gains (Bloomberg) Pretax profit at BNP Paribas’s corporate- and investment- banking unit, or CIB, rose 7.3 percent to 732 million euros, beating analysts’ estimate of 686 million euros. Revenue from equity and advisory operations climbed 51 percent to 444 million euros, while fixed-income sales more than doubled to 1.13 billion euros. After Obama Victory, Donald Trump Rants On Twitter (ABC) “We can’t let this happen. We should march on Washington and stop this travesty,” Trump Tweeted. “Our nation is totally divided! Lets fight like hell and stop this great and disgusting injustice! The world is laughing at us. This election is a total sham and a travesty. We are not a democracy! And then: “Our country is now in serious and unprecedented trouble…like never before. Our nation is a once great nation divided! The electoral college is a disaster for a democracy. Hopefully the House of Representatives can hold our country together for four more years…stay strong and never give up! House of Representatives shouldn’t give anything to Obama unless he terminates Obamacare.” And finally: “This election is a total sham and a travesty. We are not a democracy!” Fitch: No Fiscal Honeymoon For President Obama (CNBC) President Barack Obama will need to quickly secure agreement on avoiding the "fiscal cliff" and raising the debt ceiling following Tuesday's elections, Fitch Ratings said. The economic policy challenge facing the president is to put in place a credible deficit-reduction plan necessary to underpin economic recovery and confidence in the full faith and credit of the U.S., according to Fitch. Resolution of these fiscal policy choices would likely result in the U.S. retaining its triple-A status from Fitch, the firm said. Failure to avoid the so-called fiscal cliff and raise the debt ceiling in a timely manner, as well as securing agreement on credible deficit reduction, would likely result in a rating downgrade in 2013, Fitch said. The New Haven For Investors (WSJ) Treasurys have a new rival for safe-haven status: U.S. companies. Bonds of Exxon Mobil and Johnson & Johnson are trading with yields below those of comparable Treasurys, a sign that investors perceive them as a safer bet. It is a rare phenomenon that some market observers said could be the beginning of a new era for debt markets. It could ultimately mean some companies will borrow at lower rates than the U.S. government. Swiss, Greeks Begin Talks On Tax Deal (WSJ) Switzerland has begun formal talks on a deal to tax assets stashed in secret Swiss bank accounts by Greek citizens, in line with similar agreements struck with other European countries, the Swiss government said Wednesday. Woman Wearing MIT Shirt Nearly Banned From Voting In Boca Raton (BNN) A woman attempting to vote in West Boca Raton yesterday was initially prohibited from entering the polling place because she was wearing a t-shirt with the letters MIT. BocaNewsNow.com heard from multiple sources that an election supervisor at the polling place ultimately realized that MIT stands for “Massachusetts Institute of Technology” — a school where students tend to know how to spell — and was not a campaign shirt for the Republican candidate, who spells his name MITT. Campaigning is not permitted within several yards of a polling place. The woman was ultimately allowed to vote.

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