Opening Bell: Greece, Germany, Tabasco Sauce

Also: Shake Shack, Razors, Merkel, and more.
Author:
Publish date:

Eurozone Pushes for New Proposal by Greece (WSJ)
Eurozone decision makers piled pressure on Greek Prime Minister Alexis Tsipras on Tuesday, warning that without a credible new proposal on reforms his country might have to abandon the euro. Not much time is left until Greece’s banks—closed for most business for over a week now—run out of cash, which would push the already suffering country deeper into recession and a possible exit from the currency.

Germany’s Power Polarizes (WSJ)
Under the glass Reichstag dome in Germany’s parliament last week, left-wing opposition leader Gregor Gysi lit into Chancellor Angela Merkel for saddling Greece with a staggering unemployment rate, devastating wage cuts, and “soup kitchens upon soup kitchens.” The chancellor, sitting a few steps away with a blank expression on her face, scrolled through her smartphone. Ms. Merkel’s power after a decade in office has become seemingly untouchable, both within Germany and across Europe. But with the “no” vote in Sunday’s Greek referendum on bailout terms posing the biggest challenge yet to decades of European integration, risks to the European project resulting from Germany’s rise as the Continent’s most powerful country are becoming clear.

IMF: U.S. Economy at Risk of Stalling If Rates Raised Too Soon (WSJ)
The IMF’s push for a delayed rate increase is at odds with the current signals Fed officials are sending for a move later in 2015. Last week’s job numbers bolstered the Fed’s plans to increase short-term rates in the months ahead.

Man Breaks Into Restaurant, Chugs Tabasco Sauce: Cops (AP)
A man is in hot water after allegedly stealing a bicycle, pitching it through a Berlin restaurant window, then entering and quaffing half a bottle of Tabasco sauce - telling authorities he was thirsty. Police spokesman Jens Berger said Tuesday the 34-year-old was intoxicated, but it wasn't clear why he went for the bottle of Tabasco to quench his thirst. He says the man may have mistaken it for a tiny bottle of liqueur, popular in Germany. Neighbors alerted police overnight after hearing the window smash. The man was arrested inside the restaurant. Berger says after telling police he had broken in because he was thirsty, he said all he wanted to do was sleep.

Shake Shack Shares Are Plunging After Morgan Stanley Said the Stock Was Far too Expensive (Bloomberg)
Shares of Shake Shack have been plunging since the bank downgraded the stock, saying that "any way you stack it ... SHAK is expensive."

We Tried to Spend $50 at 100 Montaditos. We Failed. (Bankruptcy Beat)
Here’s our Yelp review for dinner and drinks at the 100 Montaditos on Bleecker Street in Greenwich Village: Title: “Waaaay Too Much Quality for Waaaay Too Low a Price.” Body: “The food was way too inexpensive for how great it tasted, and the happy hour drinks were just too heavily discounted. And to boot, the manager was extremely accommodating and friendly to all the guests. Also, the location is awesome and the space is great. I’m not sure how this place is still in business.” Last sentence notwithstanding, that’s a five-star review. But for a company in bankruptcy, low-priced food and drinks at high-rent locations might not be the quickest way out of chapter 11. In fact, early in the bankruptcy case, a lawyer for embattled franchisees cited that business model as one of the reasons for the Spanish chain’s struggles since expanding into the U.S.

Men’s Shaving Start-Up Raises $75.6 Million (Dealbook)
Harry’s announced on Thursday that it had raised $75.6 million, its third big round in 18 months. The new money, led by Wellington Management, values the company at roughly $675 million before the new financing is taken into account, according to a person briefed on the matter who spoke on condition of anonymity.

Grizzly Bear Slams Basketball-Sized Rock Into Glass At Minnesota Zoo (AP)
A grizzly bear exhibit at the Minnesota Zoo is temporarily closed after one of the bears picked up a basketball-sized rock and shattered a barrier. Startled visitors stood on the other side as the bear repeatedly slammed the rock into a pane of glass Monday morning. Zoo animal collections manager Tony Fisher tells the Minneapolis Star Tribune the five-layer pane stayed in place "like a windshield." No one was hurt...Fisher isn't sure which of the three bears is responsible for busting one of pane's five layers. But he suspects it was Kenai, a nearly full-grown male who is "usually the clown out there."

Related

Opening Bell: 03.26.12

Ex-Goldman Worker Said to Seek Book Deal (NYT) Greg Smith has met with publishers this week, including imprints at several prominent houses. According to several people who were present, Mr. Smith described his book as a coming-of-age story, the tale of someone who came into the business with good intentions and sky-high ideals that were ultimately pierced by Goldman’s obsessive focus on making money. It would also be a story of the history of Goldman Sachs and the perceived change in the culture of the firm that left Mr. Smith, a native of South Africa who lived in London, disillusioned and eager to leave after spending nearly 12 years there. JPMorgan Wins Case Against Trader Over Decimal Point Dispute (Bloomberg) JPMorgan doesn’t have to pay a trader 580,000 pounds ($921,000) after a missing decimal point in an employment contract led him to believe his salary would be 10 times what was offered, a London court ruled. Kai Herbert, a Switzerland-based currency trader, sued JPMorgan for lost earnings claiming he signed a contract to relocate to Johannesburg for a salary of 24 million rand ($3.1 million). JPMorgan said there was a typographical error and the figure should have been 2.4 million rand. “Herbert took the commercial risk of accepting the offer, knowing full well that the figure was an error,” Judge Henry Globe said in today’s judgment. E-Mail to Corzine Said Transfer Was Not Customer Money (Dealbook) But the e-mail, a copy of which was reviewed by The New York Times, did not capture the full story behind the wire, which turned out to contain customer money. MF Global employees in Chicago had first transferred $200 million from a customer account to the firm’s house account, people briefed on the matter said. Once it was in the firm’s coffers, the people said, Chicago employees then promptly transferred $175 million of the money to the MF Global account at JPMorgan in London — the account that was overdrawn...The e-mail suggests that Mr. Corzine, a former governor of New Jersey, was unaware that the money had been transferred from a customer account. Germany Backs Boost To Bailout Fund (WSJ) Germany has been staunchly opposed to raising the planned €500 billion ($664 billion) ceiling on the ESM, but has left the question of the EFSF open until now. It was widely believed that the EFSF would be retired as soon as the ESM is launched and that the EFSF loans already awarded would be assumed by the ESM, reducing its future lending capacity. But now Berlin is suggesting allowing the EFSF to run longer and by doing so ensure that the ESM can use its full lending capacity, effectively boosting the firewall to about €700 billion. "We are saying that the ESM should permanently have €500 billion," Ms. Merkel told a news conference in Berlin on Monday. BATS Faced Revolt Over IPO (WSJ) "The fact that our own stock was out there to be traded for the first time, and we showed systems problems, eroded customer confidence," Joe Ratterman, BATS's chief executive, said Sunday in an interview. "Of course investors are going to say, 'Hey, wait a second.'" Some traders and investors considered the offering pricey. At $16 a share, BATS would have traded at about 10 times analysts' 2013 earnings estimates. That is roughly on par with New York Stock Exchange owner NYSE Euronext and a premium to the Nasdaq OMX Group Inc., which trades at 8.6 times 2013 estimates. Even before the glitches appeared, the offering was off to a rocky start. When trading in BATS shares opened at 10:45 a.m., they were down 75 cents, to $15.25. From there, things only got worse. Hedge Funds Capitulating Buy Most Stocks Since 2010 (Bloomberg) A gauge of hedge-fund bullishness measuring the proportion of bets that shares will rise climbed to 48.6 last week from 42 at the end of November 2011, the biggest increase since April 2010, according to data compiled by the International Strategy & Investment Group. The Bloomberg aggregate hedge fund index gained 1.4 percent last month, lagging behind the Standard & Poor’s 500 Index by 2.65 percentage points. Banks Set to Cut $1 Trillion From Balance Sheets (FT) Investment banks are to shrink their balance sheets by another $1 trillion or up to 7 percent globally within the next two years, says a report that foresees a shake-up of market share in the industry. Higher funding costs and increased regulatory pressure to bolster capital will force wholesale banks also to cut 15 percent, or up to $0.9 trillion, of assets that are weighted by risk, a joint report by Morgan Stanley and consultants Oliver Wyman predicts. In addition, banks are expected take out $10 billion to $12 billion in costs by reducing pay, firing employees and paring back investments in areas that are no longer considered core. Larry Summers: Strong Recovery A "Substantial Possibility" (FT) According to Summers, the biggest risk to the recovery in the next few years is that policy will move away too quickly from its emphasis on boosting demand. "A lurch back this year towards the kind of policies that are appropriate in normal times would be quite premature," he added. Bernanke Notes Labor Market Concerns (WSJ) "Further significant improvements in the unemployment rate will likely require a more-rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies," Mr. Bernanke said in prepared remarks to the annual conference of the National Association for Business Economics. Bad fliers get boot – & bill (NYP) Fed up with disruptive fliers, the Port Authority plans to go after them for the money they cost their airline and the PA. “We’re going to use every lever at our disposal,” said PA chief Pat Foye. “These delays cost thousands of dollars — maybe tens of thousands — each. One Alec Baldwin incident can delay a whole airport for a day with cascading delays.” (Baldwin, the “30 Rock” star, made international headlines in December when he got booted by American Airlines at LAX after refusing to turn off his phone.) The PA is going to “aggressively’’ remind passengers to keep cool and listen to instructions from airline crews — even if they think they’re stupid, Foye said.