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Opening Bell: 9.23.15

Martin Shkreli will cut drug price even though he still thinks you should all suck it; Popes at UN = good for markets; "Burrito Blamed For Bus Crash"; and more.
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Turing to Cut Price of Drug Daraprim After Increase Sparks Outcry (WSJ)
The drug, Daraprim, had cost $13.50 a tablet before Turing Pharmaceuticals AG bought the U.S. rights in August from Impax Laboratories Inc. and raised the price to $750. The increase became a poster child for high drug prices, which have been attacked by drug-benefit managers and some Democrats. Over the last few days, privately held Turing and Chief Executive Martin Shkreli have resisted criticism over Daraprim’s price hike, saying the drug had been underpriced and the higher returns would fund research into a new and better treatment. Mr. Shkreli had also rejected cutting the drug’s price, while lashing out at critics on social media. Mr. Shkreli didn’t respond to requests for comment.

Google Opens to Wall Street (WSJ)
Google Inc. has long ignored most Wall Street conventions, but that is changing under new Chief Financial Officer Ruth Porat. Earlier this month, the Internet giant began offering analysts 15- to 30-minute briefings on Google’s business, according to people familiar with the situation. Many publicly traded companies conduct similar calls, which tiptoe around securities laws. Until now, though, Google wasn’t among them, analysts say.

Papal visits to the UN usually mean good news for Wall Street (NYP)
Three previous popes made four addresses — and the Dow Jones industrial average gained an average of 1.23 percent on the day each appeared, research reveals. A similar advance on Friday could result in a 200-point pop for the Dow. “Just as studies have shown that bad weather can affect the mood of the market, so, too, does the visit by the pontiff,” Sam Stovall, an analyst at S&P Capital IQ, told The Post. “Not only does it end up being uplifting for the faithful, but also encouraging for the fundamental.” The last papal appearance at the UN was Pope Benedict XVI’s visit on April 18, 2008 — and it also had the best reaction by Wall Street. The Dow jumped 1.8 percent that day.

McDonald's offering reserved tables to promote burger (UPI)
The company said 30 Swedish McDonald's locations are offering reservation packages Sept. 25-Oct. 2 on website Bookatable for tables where customers will be served a two-course meal consisting of the new Maestro Classic burger and a dessert option. "We have a very exciting and tasty new premium hamburger coming to our restaurants, the Maestro Classic, so we wanted to give our most loyal customers a unique and memorable experience when they try the Maestro hamburger for the very first time," McDonald's Sweden Director of Marketing Jeff Jackett said.

Gross Tells Fed to `Get Off Zero Now!' as Economies Run on Empty (Bloomberg)
If zero interest rates become the long-term norm, economic participants will soon run on empty because their investments aren’t producing the gains or cash flow needed to finance past promises in an aging society, he wrote in an investment outlook on Wednesday for Denver-based Janus Capital Group Inc. That’s already beginning to happen in the developed world, where Detroit, Puerto Rico, and, he predicts, soon Chicago, struggle to meet their liabilities.

Draghi Says Time Needed to Judge If More Stimulus Necessary (Bloomberg)
“More time is needed to determine in particular whether the loss of growth momentum in emerging markets is of a temporary or permanent nature,” the ECB president said in his quarterly testimony to European Parliament lawmakers in Brussels on Wednesday. Officials need to “assess the driving forces behind the drop in the international price of commodities and behind the recent episodes of severe financial turbulence,” he said.

Burrito Blamed For Bus Crash (HP)
Newly released surveillance video shows Perea was eating a burrito behind the wheel at the time of the crash. At one point, he can be seen taking both hands off the wheel in order to take a bite, KOB TV reports. The video shows Perea putting down the burrito and apparently taking his eyes off the road. The driver doesn't seem to notice a line of cars stopped ahead of him until he hit one car, causing a chain reaction of crashes. One driver injured in the crash is now suing the City of Albuquerque for damages. City officials aren't commenting on the lawsuit, but told KOAT TV that bus drivers aren't allowed to eat or drink while driving.

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EU Bonus Rules Meet Anger (WSJ) The new rules would prevent banks from promising bonuses that exceed an employee's salary—though, with shareholder approval, bonus payments could rise to double the salary. The rules, which are supposed to kick in at the beginning of next year and appear to be the world's toughest, still need to be approved by EU member states and the full European Parliament. European banking executives and trade groups say the rules—which are likely to apply to all European bank's employees around the world—will put the industry at a severe disadvantage relative to U.S. and Asian banks, and that it will provoke unintended consequences. Banks early Thursday weren't yet publicly commenting as they digested the news. But executives privately didn't hold back. "It's a disaster," said a senior investment-banking executive at a top European bank. "It's a crazy policy" that could jeopardize European banks' abilities to hire employees in the U.S. or Asia. Jockeying Stalls Deal On Spending Cuts (WSJ) With mandatory across-the-board spending cuts set to begin Friday, the White House and congressional Republicans are poised to let the deadline pass, each calculating that their hand in negotiations only grows stronger if they scorn a quick compromise. The first face-to-face meeting on the issue between President Barack Obama and congressional leaders won't happen until Friday—the deadline for Mr. Obama to set in motion $85 billion in broad spending cuts. None of the participants expect the morning meeting at the White House to produce a breakthrough. In the run-up, with no serious talks under way, each side is maneuvering to ensure the other catches the blame if the cuts kick in. Cuts Unlike To Deliver Promised US Budget Savings (Reuters) The $85 billion cut to budget authority amounts to about 2.4 percent of the $3.6 trillion the U.S. government is expected to spend in the fiscal year that ends on Sept. 30. The actual amount of savings is much less - $43 billion in the current fiscal year, according to the Congressional Budget Office. That's because federal agencies don't spend all of the money they are allocated in any given fiscal year. A $1 billion aircraft carrier, for example, may take years to build. Even at that lower level, the effects are likely to ripple across the world's largest economy in a way that will work against deficit-reduction efforts. Scrutiny Of Heinz Trades Grows (WSJ) The Financial Industry Regulatory Authority, a Wall Street self-regulator, and the Federal Bureau of Investigation are reviewing numerous trades in Heinz stock shortly before the buyout announcement sent the share price soaring Feb. 14, the people said. The inquiries add to an investigation the Securities and Exchange Commission disclosed Feb. 15 into what it called a "highly suspicious" $90,000 purchase of stock options the day before the deal, a position with a potential profit of $1.7 million. The FBI also has said it launched a criminal investigation into options activity ahead of the deal. Flowers Foods Set To Buy Wonderbread From Hostess (NYP) After no other bidders emerged to challenge it, Flowers Foods is set to snare Wonder and a slew of other bread brands being sold by bankrupt Hostess Brands for $360 million. How The Pope's Retirement Package Compares To Yours (CNBC) Let's start with the basics: The pope emeritus will receive a monthly pension of 2,500 euros, according to Italian newspaper La Stampa. That translates to almost $3,300, or close to the monthly maximum of $3,350 that Social Security will pay to an American who retires this year. Few people will actually qualify for that amount. For starters, you would have to wait until 70 to retire. You would also have to spend most of your working life earning Social Security's taxable maximum pay, which is set at $113,700 this year. "That's quite rare," said Richard Johnson, director of the program on retirement policy at the Urban Institute. He pointed out that the average Social Security check is about $1,200 a month — not enough to pay for the typical American retiree's expenses. "For most people, if you look at the median, Social Security counts for about 40 percent of their income. So it's important, but people rely a lot on other savings, like pensions or 401(k) savings," Johnson said. A big nest egg is not something the pope emeritus has to worry about. The Roman Catholic Church will cover his living expenses, provide him with a spacious home inside the Vatican and pay for everything from cooked meals to housekeepers, according to The Telegraph. Such services are not available to the typical American senior, unless he or she pays for an assisted living facility or resides in a nursing home, Johnson said...Health care costs are one of the big risks that older Americans face, and while Medicare pays for the bulk of their expenses, many things are left uncovered, Johnson said. Meanwhile, the pope emeritus will continue to be a member of the Vatican's generous private health care policy, the BBC reported. Blackstone Profits From Regulation With Citigroup Deal (Bloomberg) Blackstone has devised a way to profit from regulation: It’s helping banks meet tougher capital rules without the pain of selling assets or raising equity. The firm last year insured Citigroup against any initial losses on a $1.2 billion pool of shipping loans, said two people with knowledge of the transaction, who asked not to be identified because the matter is private. The regulatory capital trade, Blackstone’s first, will let Citigroup cut how much it setsaside to cover defaults by as much as 96 percent, while keeping the loans on its balance sheet, the people said. RBS Moves To Appease UK (WSJ) The 81%-state-owned bank unveiled a series of moves to ease government and regulatory pressure on the bank to become more U.K. focused and better capitalized. Chief Executive Stephen Hester confirmed that it would list around 25% of the U.S.-based RBS Citizens bank in the next two years "to highlight the valuable nature of the business." RBS also said it would further pare back its investment bank, shedding jobs and cutting risk-weighted assets to £80 billion ($121.3 billion), from £101.3 billion at the end of 2012. Unemployment aid claims fall by 22,000 last week (AP) The number of Americans seeking unemployment aid fell 22,000 last week to a seasonally adjusted 344,000, evidence that the job market may be picking up. The four-week average of applications dropped 6,750 to 355,000, the Labor Department said Thursday. That was the first drop in three weeks. Too Big To Fail Hurting Too Small To Compete Banks (Bloomberg) Investors such as Joshua Siegel, founder and managing principal at New York-based StoneCastle Partners LLC, see bigger changes at the other end of the spectrum. Small banks will seek mergers because their management teams are aging and new regulations are too costly to bear, he says. “If you need one major overriding theme of the industry in the next three, five, seven, 10 years: massive consolidation, thousands of banks,” says Siegel, whose firm managed $5.1 billion as of the end of last year and invests in small banks. In the U.S., “I do see probably anywhere from 2,000 to 4,000 banks being swallowed up, and what you’ll see then is a more- concentrated system.” Dennis Rodman Tells Kim Jong Un: You Have A Friend For Life (NYP) Rodman and Kim sat side by side at an exhibition game in Pyongyang on Thursday, chatting as they watched players from North Korea and the US play in mixed teams, Alex Detrick, a spokesman for the New York-based VICE media company, told The Associated Press. Rodman later addressed Kim before a crowd of thousands, telling him, "You have a friend for life," Detrick said. The encounter makes Rodman the most high-profile American to meet with the young North Korean leader, said to be a diehard basketball fan.