Opening Bell: 10.7.15

Fantasy sports probe; Ackman says GE was too expensive; TPG raises real estate fund; Steve Cohen is loving life; "College bro arrested over mac-and-cheese rant at food court"; and more.
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Ackman Says General Electric Great Operator, ‘Terrible’ Investor (Bloomberg)
Billionaire investor Bill Ackman said his activist fund spent “an enormous amount of time working on” a potential investment in General Electric Co. before GE announced the sale of most of its real estate assets in April, and concluded it “wasn’t cheap enough.”

Trans-Pacific Currency Deal Puts Yellen's Fed in the Spotlight (Bloomberg)
As a sidebar to the largest trade pact in two decades, the U.S. and 11 other Pacific Rim countries agreed not to manipulate foreign-exchange rates and to consult on monetary policies. Economies like Vietnam and Malaysia, which rely heavily on exports, promised not to devalue their currencies in order to gain a competitive advantage. In exchange, they want to get more insights into U.S. monetary policy. An interest rate hike, the first in almost a decade, will probably prompt capital to flee developing nations, causing their currencies to slump.

New York Attorney General Opens Inquiry Into Fantasy Sports Sites (NYT)
The New York attorney general began an inquiry Tuesday into the prospect that employees of daily fantasy football sites have won lucrative payouts based on inside information not available to the public, asking two leading companies, DraftKings and FanDuel, for a range of internal data and details on how they prevent fraud. Word of the inquiry came as the revelation that DraftKings and FanDuel allowed their employees — many with information not available to customers — to play at each other’s sites and win large amounts of money continued to rattle the sports world. Some of the industry’s primary sponsors raised questions or distanced themselves from lucrative advertising and sponsorship deals. On Monday, both companies told The New York Times that they had temporarily prohibited their employees from playing in money games.

Big U.S. firms hold $2.1 trillion overseas to avoid taxes: study (Reuters)
The 500 largest American companies hold more than $2.1 trillion in accumulated profits offshore to avoid U.S. taxes and would collectively owe an estimated $620 billion in U.S. taxes if they repatriated the funds, according to a study released on Tuesday. The study, by two left-leaning non-profit groups, found that nearly three-quarters of the firms on the Fortune 500 list of biggest American companies by gross revenue operate tax haven subsidiaries in countries like Bermuda, Ireland, Luxembourg and the Netherlands.

College bro arrested over mac-and-cheese rant at food court (NYP)
A University of Connecticut student has gotten into a confrontation with a campus food court manager who wouldn’t let him buy macaroni and cheese with bacon and jalapeno peppers and has been arrested. An obscenity-laced video shows 19-year-old freshman Luke Gatti arguing with and shoving the manager on Sunday. Gatti had been trying to buy the mac and cheese at the university’s student union in Storrs. Police and the manager say he was refused service because he had an open alcohol container. The nine-minute video shows Gatti being tackled by another employee, being arrested by police and spitting at the manager before being led away.

TPG Raises $2 Billion in Real-Estate Fund (WSJ)
Private-equity giant TPG has closed its first high-risk real-estate fund, raising more than $2 billion in commitments at a time when big investors’ appetite for real-estate risk is increasing. TPG, a relatively new player in real-estate investment, began fundraising for the dedicated real-estate fund it just closed in the first half of 2014, with a goal of $1.5 billion to $2 billion. Reaching that goal was challenging, even for a firm as big as TPG, which has a total of $75 billion in assets under management.

Bharara’s loss is a win for ex-hedge fund honcho Steve Cohen (NYP)
The Supreme Court’s refusal to hear the government’s appeal of a key insider-trading case weakens the Securities and Exchange Commission’s ongoing civil case against the former hedge-fund titan, legal experts told The Post. The SEC’s civil proceeding against Cohen stems from accusations that he failed to properly supervise Michael Steinberg and other traders at his SAC Capital Advisors hedge fund, which had $14 billion in assets before it pled guilty to insider trading. But Steinberg’s conviction is likely to be tossed because his case is almost exactly identical to that of Todd Newman and Anthony Chiasson, whose convictions were overturned by a Manhattan appeals court. In a stunning rebuke to the government, the Supreme Court on Monday let the appeals decision stand...The SEC’s case against Cohen has been stayed seven times at the request of Manhattan US Attorney Preet Bharara. Most recently, Bharara on Aug. 27 asked the SEC to stay the case again — this time until the Supreme Court decided whether to review the Newman case. The SEC said it would hold off making a decision in its administrative proceeding against Cohen until Nov. 30.

Bain Capital to Close a Hedge Fund (WSJ)
Private-equity firm Bain Capital LLC told investors it would shut down one of its hedge funds, the latest industry closure after a period of turmoil in global markets. The decision follows a period of losses for Bain’s Absolute Return Capital LLC, according to a person familiar with its performance. Absolute Return Capital said in a letter to investors Tuesday that it would return their cash and liquidate because of a “challenging” environment for funds that bet on global economic trends, according to a person familiar with the letter.

Patek Philippe Quietly Runs an Elite (Free!) Watchmaking School in New York (Bloomberg)
If you've been thinking about become a watchmaker, now might be your chance: Patek Philippe is opening the Patek Philippe Horology Programme New York, a free, two-year watchmaking course to train the next generation of specialized watchmakers.

Cops: "Too High" Man Surrounded By Snacks Stash (TSG)
An Ohio man who dialed 911 to report that he was “too high on weed” was found curled up on the floor of his bedroom “surrounded by a plethora of Doritos, Pepperidge Farm Goldfish, and Chips Ahoy cookies,” according to a police report. When an officer arrived Friday afternoon at the 22-year-old caller’s Austintown residence, the man’s grandfather directed the cop to an upstairs room. The officer reported that the man “could be heard groaning from a room at the end of the hall.” Upon entering the room, Officer Aaron Franks found the man “laying on the floor, in the fetal position.” The marijuana enthusiast was “surrounded by a plethora of Doritos, Pepperidge Farm Goldfish, and Chips Ahoy cookies,” noted Franks. While the man declared that he “smoked too much weed” and was “too high and could not feel his hands,” he declined medical treatment.

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Opening Bell: 09.26.12

Spain Prepares More Austerity, Protesters Battle Police (Reuters) Protesters clashed with police in Spain's capital on Tuesday as the government prepared a new round of unpopular austerity measures for the 2013 budget to be announced on Thursday. Thousands gathered in Neptune plaza, a few metres from El Prado museum in central Madrid, where they formed a human chain around parliament, surrounded by barricades, police trucks and more than 1,500 police in riot gear. Police fired rubber bullets and beat protesters with truncheons, first as protesters were trying to tear down barriers and later to clear the square. The police said at least 22 people had been arrested and at least 32 injured, including four policemen. Facebook's Next Fight: Suits And More Suits (WSJ) About 50 lawsuits have been filed against Facebook, Nasdaq OMX Group Inc. and underwriters of Facebook's May IPO, according to lawyers involved in the cases. In addition, securities lawyers who represent Facebook investors say they expect hundreds of arbitration claims to be launched against brokers and securities firms that pitched the company's shares. Credit Suisse Said to Consider Merging Its Asset-Management Unit (Bloomberg) The bank is considering combining its asset-management unit with the private and investment banking divisions, a person familiar with the matter said. SAC Capital Fund Manager Said To Be Uncharged Conspirator (Bloomberg) The role allegedly played by Michael Steinberg emerged in court papers filed by the U.S. in the securities-fraud case of Jon Horvath, a former technology analyst at Cohen’s $14 billion hedge fund who Steinberg supervised. Steinberg, who hasn’t been charged with a crime, is the fifth person to be tied to insider trading while employed at SAC. Horvath faces trial Oct. 29 in Manhattan federal court along with two other portfolio managers for his part in what Manhattan U.S. Attorney Preet Bharara called a “criminal club:” a conspiracy of hedge fund managers, co-workers and company insiders who reaped millions of dollars on illegal tips about Dell Inc. and Nvidia Corp. “The government added four additional co-conspirators,” prosecutors wrote in a Sept. 6 letter filed with the court, with the names blacked out. One of them, the U.S. said, is “the portfolio manager to whom Jon Horvath reported at his hedge fund.” That person was Steinberg, said the people, who declined to be identified because the matter isn’t public. UK Group To Give Up Libor Oversight (WSJ) The council of the BBA, a private trade association, voted earlier this month to give up management of Libor, according to people familiar with the matter. The move clears the way for what is likely to be the biggest change in Libor's 26-year history, and introduces the possibility that British or international regulators could be in charge of overseeing the rate, which is tied to trillions of dollars of financial contracts. Rent-a-reptile: Florida company adds alligators to kids’ pool parties (NYDN) Bob Barrett gives Florida kids pool parties they’ll never forget — because they get to swim with real live alligators. Jump houses? Pizza parties? Boring, says Barrett. “You jump for a while and that’s it, we’ve had that party before,” he told the Daily News. “Clown party, Chuck E. Cheese party, they’ve all been done.” Barrett,who runs Alligator Attractions in Madeira Beach — where visitors get to hold gators — was already bringing his reptiles around to birthday parties when he was inspired to take the next step. “We would do [an alligator demonstration] at someone’s house and they would have a pool,” he explained. “And I said, you know, ‘Hey, let’s put ‘em in the pool.’” Hedge Fund Skeptics Warn on ‘QE Infinity’ (FT) “A man’s got to know his limitations,” says “Dirty Harry” Callahan, the gun-toting, rule book-ignoring cop immortalized by Clint Eastwood in “Magnum Force.” It is a principle the U.S. Federal Reserve – which earlier this month embarked upon its own, third bout of “unorthodox” enforcement, “QE3” – could learn from, according to Stephen Jen, the former Morgan Stanley foreign-exchange guru turned hedge fund manager. “The Fed officials are some of the smartest economists around,” he wrote in his most recent note to clients. The trouble is, said Mr. Jen, “they know everything except their own limitations.” Irish Bank Offers Properties For 70% Less Than 2007 Value (Bloomberg) RBS's Irish unit offered to sell properties, including 640 apartments and a hotel, for about 70 percent less than their value at the market’s 2007 peak, according to the broker managing the sale. The Gemini portfolio, containing buildings in the Irish cities of Dublin and Cork, has an asking price of 75 million euros ($97 million), according to Domhnaill O’Sullivan, a director at Savills Plc (SVS)’s Dublin office. MIT Miscounts Its New B-School Students (WSJ) After realizing they had a student surplus, school officials emailed the incoming class on Aug. 7, offering "guaranteed admission to the class of 2015 for the first 20 admitted students who request it." The school gave them until Aug. 13 to respond, according to one student's copy of the letter, which was reviewed by The Wall Street Journal. But it didn't get enough takers. So, like an airline offering vouchers to travelers willing to hop off oversold flights, the school put money on the table, offering students who expressed an interest a $15,000 scholarship to be applied to next year's tuition. Students still balked, and on Aug. 21, a day after pre-term refresher courses began, Sloan raised the offer to $20,000 for the first 10 respondents. (Tuition for the 2012-2013 academic year is $58,200, with total expenses—including books, housing and food—estimated at just under $89,000.) NFL replacement referee who blew touchdown call in Green Bay Packers-Seattle Seahawks game is a full-time banker (NYDN) ...fans, particular those in Wisconsin, said the 52-year-old southern California banker with no previous professional or major college refereeing experience should have never left his desk to become a replacement during the NFL’s lockout of unionized refs. Even the Lingerie Football League piled on, revealing that some of the scab refs weren’t qualified to work its games. “Due to several on-field occurrences of incompetent officiating, we chose to part ways with a crew which apparently is now officiating in the NFL,” said Mitch Mortaza, commissioner of the female bra-and-panty league. “We have a lot of respect for our officials, but we felt the officiating was not in line with our expectations.”

Opening Bell: 10.8.15

Goldman, Morgan Stanley win back hedge fund business; BlackRock says shut.it.down; Clinton will propose tax on high frequency trading; "Student reportedly expelled from UConn for mac and cheese tantrum"; and more.

Opening Bell: 8.13.15

Dean Foods/Phil Mickelson probe; Greece woes; Citigroup's bad bank makes good; "Man Assaults Brother For Not Sharing Big Macs, Police Say"; and more.

Opening Bell: 06.21.12

SEC Said To Depose SAC’s Cohen In Insider-Trading Probe (Bloomberg) Cohen, 56, was recently deposed by Securities and Exchange Commission investigators in New York about trades made close to news such as mergers and earnings that generated profits at his hedge fund, said one of the people, who asked not to be identified because the investigation isn’t public. Neither Cohen nor SAC Capital, which oversees about $14 billion, has been accused of wrongdoing. Four-Week Jobless Claims Average Reaches 2012 High (Reuters) Initial claims for state unemployment benefits slipped 2,000 to a seasonally adjusted 387,000, the Labor Department said. The prior week's figure was revised up to 389,000 from the previously reported 386,000. Lawmakers Call For IPO Overhaul (WSJ) A bipartisan group of lawmakers called on regulators to overhaul the way initial public offerings are conducted, concerned that last month's flubbed stock sale by Facebook shows the current system unfairly punishes small investors. In a letter to Securities and Exchange Commission Chairman Mary Schapiro, Rep. Darrell Issa (R., Calif.) prodded the agency to revamp rules for pricing and disclosure in IPOs. Mr. Issa, who wrote the letter on behalf of the House Oversight and Government Reform Committee, said the social-networking company's steep share-price decline since its May 18 offering is a sign that investment banks are able to "dictate pricing while only indirectly considering market supply-and-demand." Separately, the Democratic chairman of a subcommittee of the Senate Banking Committee said regulatory changes are needed to bolster investor confidence sapped by Facebook's botched debut. Facebook’s 22% Rally Helps Stock Avoid Worst IPO Return In U.S. (Bloomberg) So that's something! Riskier Bets Pitched To Asia's Rising Rich (WSJ) In Japan, brokers are dangling what they claim is a tasty product in front of wealthy investors: a "triple-decker" that uses options to squeeze higher returns from stocks, "junk" bonds or other assets. If a triple-decker doesn't suit an investor's fancy, there is the increasingly popular—and slightly less complex—"double-decker." Elsewhere in Asia, so-called hybrid bonds and other high-yield varieties can be had. Investors in Singapore recently could buy so-called perpetual bonds through ATMs. Across Asia, brokers are pushing to sell increasingly complex products to the region's expanding ranks of investors, especially wealthy ones. These types of products appeal to those hungry for yield who normally focus on stocks and real estate but are worried about falling equity markets and the sudden shortage of initial public offerings. BlueMountain Said To Help Unwind JPMorgan’s Whale Trades (Bloomberg) A hedge fund run by a former JPMorgan Chase executive who helped create the credit- derivatives market is aiding the lender as it unwinds trades in an index at the heart of a loss of more than $2 billion. BlueMountain Capital Management LLC, co-founded by Andrew Feldstein, has been compiling trades in Series 9 of the Markit CDX North America Investment Grade Index in recent weeks, then selling the positions to the New York-based bank, according to three people outside the firms who are familiar with the strategy. JPMorgan tapped BlueMountain as a middleman after trades in its London chief investment office grew so large that the bank was creating price distortions that hedge funds sought to exploit, said the market participants, who asked not to be identified because they weren’t authorized to discuss the trades. BlueMountain was one of the funds that benefited from the price dislocations, the people said. US Olympic committee send cease and desist letter to knitting Olympics (TNT) The US Olympic committee has sent a cease and desist letter to the social networking group Ravelry, who had organised a Ravelympics in which contestants would compete in events such as ‘scarf hockey’ while watching the actual Games on TV...The US Olympic Committee has said that “the athletes of Team USA have spent the better part of the entire lives training for the opportunity to compete at the Olympic Games and represent their country in a sport that means everything to them” and that “using the name ‘Ravelympics’ for a competition that involves an afghan marathon and sweater triathlon tends to denigrate the true nature of the Olympic Games”. Romney Campaign Said To Ask Scott To Downplay Job Gains (Bloomberg) Mitt Romney’s presidential campaign asked Florida Governor Rick Scott to tone down his statements heralding improvements in the state’s economy because they clash with the presumptive Republican nominee’s message that the nation is suffering under President Barack Obama, according to two people familiar with the matter. Scott, a Republican, was asked to say that the state’s jobless rate could improve faster under a Romney presidency, according to the people, who asked not to be named. Lonely Hedge Fund Bullish On Greece Tries To Woo Investors (Bloomberg) In March, Elliott met with the investment chief of a family office in London who said within seconds of sitting down that the firm had no interest in giving money to a hedge fund wagering on Greece. The executive merely wanted to hear his story, Elliott, the founder of Naftilia Asset Management Ltd., said in a telephone interview from his office in Athens. Elliott, 39, responded by asking a few questions of his own, including whether the executive had invested in Russia after its 1998 currency crisis, in Argentina 10 years ago after the nation defaulted on its debt or in the Standard & Poor’s 500 Index (SPX) in March 2009, when the benchmark plunged to its lowest point in 13 years. Finally, Elliott questioned whether the family office’s investment chief had ever bought shares of Apple. In all cases, the answer was no. “Then you are not qualified to be discussing Greece with me because you have missed the best investment opportunities over the past 20 years,” Elliott retorted. National Bank Of Greece To Sell Luxury Resort As Slump Bites (Bloomberg) If you know anyone who's interested: The 3.3 million-square-foot (307,000 square-meter) Astir Palace complex has already drawn investors’ interest, according to Aristotelis Karytinos, general manager of real estate at the lender. The Athens-based bank and Greece’s privatization fund, which owns part of the property, will put out a public tender in coming months, he said. Fed Warns Of Risk To Economy (WSJ) Fed Chairman Ben Bernanke made clear in a news conference after the policy makers' meeting that he is prepared to take further action if he doesn't see progress on bringing down unemployment, which was 8.2% in May. "I wouldn't accept the proposition though that the Fed has no more ammunition," Mr. Bernanke said. He added, "if we don't see continued improvement in the labor market we'll be prepared to take additional steps." Australian mega-brothel gets go-ahead (AP) A Sydney brothel has received the green light for a multi-million-dollar expansion which will see it become Australia's largest sex premises, with rooms featuring multiple beds and pool tables. Plans to double the number of rooms at inner Sydney's "Stiletto" into a mega-brothel complex were knocked back late last year by the city council on the grounds that it was too big. But the owners won an appeal to the Land and Environment Court this week, with Commissioner Susan O'Neill ruling the Aus$12 million ($12.2 million) development, including a wing for group bookings, should go ahead...Stiletto promotes itself as "the world's finest short-stay boutique hotel and Sydney brothel". Its standard hourly rate of Aus$370 includes room, lady of choice and beverages.

By Maggie Hoffman (Tomato Soup Grilled Cheese) [CC BY 2.0], via Wikimedia Commons

Opening Bell: 8.5.16

Wilbur Ross expects Donald Trump to start acting normal; Goldman warns on Brexit effects; Georgia man busted after raging at wife over too cheesy grilled cheese sandwich; and more.

Opening Bell: 4.28.15

Flash crash trader fails to make bail; Tsipras says Greeks will have to give final say on deal; Apple Apple Apple; Mac and cheese causes evacuation; and more.

Opening Bell: 04.17.13

BofA Misses Estimates as Mortgage Banking Weighs on Results (Bloomberg) Net income advanced to $2.62 billion, or 20 cents a share, from $653 million, or 3 cents, a year earlier, according to a statement today from the Charlotte, North Carolina-based company. The consensus of 25 analysts surveyed by Bloomberg had predicted 23 cents a share. Chief Executive Officer Brian T. Moynihan, 53, has sold more than $60 billion in assets, settled more than $40 billion in mortgage claims and repaired the bank’s balance sheet since taking over in 2010. He’s now focused on trimming $8 billion in annual expenses and adding revenue, which dropped 8.4 percent on an adjusted basis to $23.9 billion. BNY Mellon Has Net Loss of $266 Million on Tax Expense (Bloomberg) BNY Mellon had a net loss of $266 million, or 23 cents a share, compared with a profit of $619 million, or 52 cents, a year earlier, the New York-based bank said today in a statement. Earnings were cut by $854 million, or 73 cents, because it wasn’t allowed to take foreign tax credits. Excluding the item, BNY Mellon earned $588 million, or 50 cents a share. Analysts had expected BNY Mellon to report an adjusted profit of 52 cents a share, the average of 22 estimates in a Bloomberg survey. IMF Renews Call To Ease Austerity (WSJ) Seeking to keep a fragile global recovery on track, the International Monetary Fund on Tuesday called on countries that can afford it—including the U.S. and Britain—to slow the pace of their austerity measures. The fund warned that "overly strong" belt-tightening in the U.S. will slow growth this year. Across-the-board government spending cuts, known as the sequester, were the "wrong way" to shrink the budgetdeficit, it said in its semiannual report on economic growth. Bitcoin Investors Hang On For The Ride (WSJ) Norman Vialle, a 53-year-old car dealer in Kansas, invested in his share of winners and losers during the Internet bubble of the 1990s. Now he is clinging to a stash of Bitcoin, even though the fledgling virtual currency has lost about 70% of its value in the past week. "It's volatile because it's new, but it's still a lot higher than it was a month ago," Mr. Vialle says. In addition to investing in the currency, Mr. Vialle recently began accepting bitcoins for payment at Overland Park Jeep Dodge Ram Chrysler. One of his customers is planning to pay for a $40,000 Jeep with the currency next month. Grantham man explains why he has Margaret Thatcher tattooed on his leg (ITV) The unusual design features Baroness Thatcher's head sitting on an ice cream cone. Louis Maier, aged 32, wanted to have the six-inch work of art on his right calf to honour her. Cyprus Finance Minister Sees Gold Sale Within Next Months (Bloomberg) The Cypriot government plans to sell part of its gold reserves within the next months, a decision that needs to be approved by the country’s central bank, Finance Minister Haris Georgiades said. “The exact details of it will be formulated in due course primarily by the board of the central bank,” Georgiades, 41, told Bloomberg TV’s Ryan Chilcote in an interview in Nicosia. “Obviously it’s a big decision.” Gold's Fall Costs Paulson $1.5 Billion This Year (FT) The estimated losses for Mr. Paulson, who has made and lost more money on gold than almost any other hedge fund manager, reflect a bold all-in bet on the precious metal While many investors hold some gold in case of financial calamity or a return of the rampant inflation of the 1970s, since 2009 Mr. Paulson has allowed clients of Paulson & Co to denominate their holdings in gold, rather than US dollars. Mr. Paulson enthusiastically embraced the option, according to people familiar with the situation, and has about 85 percent of his personal capital in the firm linked to the gold price. Gold's Great Unraveling Had a Few Harbingers (WSJ) The gold-price rout began taking shape in the early morning hours Monday, after a sharp Friday selloff in a market that had risen steadily for a decade left traders girding for a downdraft. Some in London began arriving at work Sunday night ahead of the market's Asia opening to prepare for the onslaught, while others arrived as early as 4 a.m. Monday, even though a paucity of traders at this time limits most trading options until about 8 a.m. Forget Gold, the Gourmet-Cupcake Market Is Crashing (WSJ) The craze hit a high mark in June 2011, when Crumbs Bake Shop, a New York-based chain, debuted on the Nasdaq Stock Market under the ticker symbol CRMB. Its creations—4" tall, with fillings such as vanilla custard, caps of butter cream cheese, and decorative flourishes like a whole cookie—can cost $4.50 each. After trading at more than $13 a share in mid-2011, Crumbs has sunk to $1.70. It dropped 34% last Friday, in the wake of Crumbs saying that sales for the full year would be down by 22% from earlier projections, and the stock slipped further this week. Crumbs in part blamed store closures from Hurricane Sandy, but others say the chain is suffering from a larger problem: gourmet-cupcake burnout. "The novelty has worn off," says Kevin Burke, managing partner of Trinity Capital LLC, a Los Angeles investment banking firm that often works in the restaurant industry. Crumbs now has 67 locations, nearly double the number it had less than two years ago. "These are singularly focused concepts," says Darren Tristano, executive vice president at Technomic Inc., a Chicago research and consulting firm that specializes in the food industry. "You're not going to Crumbs every day." "It's a short-term trend and we're starting to see a real saturation," he adds. "Demand is flat. And quite frankly, people can bake cupcakes."