Opening Bell: 11.9.15

Wall Street braces for bonus cuts; Central banker says fed hike makes sense; "Rumblr, the 'Tinder for Fighting' app, to launch its beta trial on Nov. 9"; and more.
Author:
Publish date:

Wall Street Bracing for Lower Bonuses for First Time in Years (WSJ)
Chaotic global markets harmed the returns of many money managers and delayed companies’ plans to go public, affecting pay for asset-management employees and investment bankers charged with underwriting initial public offerings. Bonuses for fixed-income traders are also expected to drop for a fifth year in a row as large banks continue to wrestle with new regulations that rein in risk-taking. The last time year-end payouts dropped across the industry was 2011, according to Johnson Associates. The consulting firm based its 2015 projections on how much firms had set aside for employee pay and benefits through the first nine months of the year, along with discussions with clients.

Hedge-Fund Prodigy Takes a $300 Million Hit (WSJ)
Nehal Chopra has reached a less glorious milestone: more than $300 million in paper losses over the past three months, one of the swiftest and most severe money-losing streaks in a bruising year for hedge funds. Ms. Chopra’s Tiger Ratan Capital Fund LP fell about 33% over the past three months, wiping out her gains for 2015 and eating into more than half of last year’s profits, according to investor documents and people familiar with the matter. Ms. Chopra, without warning, recently stopped updating prospective investors on the firm’s performance.

Fed rate hike 'makes sense,' says US central banker Williams (Reuters)
Now that the United States is closing in on full employment and inflation is likely to rise to target levels, the "next step" should be to start gradually increasing rates, a top U.S. central banker said on Saturday.

Square's Lower IPO Valuation Casts Shadow Over Startups (Bloomberg)
The mobile-payments provider is seeking a market valuation of as much as $4.2 billion in its trading debut, a significant cut from the $6 billion the company sought in its last funding round in 2014. This is fueling concerns that there’s a wide -- and expanding -- gulf between between how private investors and public markets value companies. So far, there’s been a dearth of technology IPOs to test the theory, partially because startups have been staying private longer and bolstering their coffers through large funding rounds. Square’s (NYSE: SQ) IPO -- led by Chief Executive Officer Jack Dorsey -- could force investors and founders to rethink private valuations and move to go public earlier, said Gil Luria, an analyst at Wedbush Securities Inc.

Fire at Stamford hedge fund headquarters (Stamford Advocate)
Firefighters battled a blaze at the headquarters of billionaire and former hedge fund giant Steven A. Cohen’s Point72 Asset Management at 72 Cummings Point Road early Saturday morning. Crews encountered heavy smoke when they arrived at the two-alarm blaze around 8:30 a.m., and once on the roof found a “large air conditioning unit well involved and threatening several other adjacent units and the roof of the building,” Acting Deputy Chief Shaun Tripodi said late Saturday evening in an emailed statement...The trading floor and data rooms were unaffected, Tripodi said. A Point72 spokesman, Mark Herr, said the damage inside the building was minimal, with some water damage in the pantry area of the second floor. No Point72 employees were hurt, he said. The fire department’s statement said the firefighters “performed salvage operations,” putting tarps over office equipment to limit water damage.

Rumblr, the 'Tinder for Fighting' app, to launch its beta trial on Nov. 9 (NYDN)
"Rumblr," a pending app idea, is pitching itself as Tinder, but for brawling. Like the dating app, Rumblr users would meet strangers, but instead of hooking up, they'd be swinging right hooks. As bizarre as it sounds, the app's creator claims it's "100% serious," and not a "Fight Club"-style hallucination. "We have raised relatively substantial funding from private American investors and the app is fully developed," the Rumblr team told the Daily News in an email. "Rumblr is an app for recreational fighters to find, meet and fight other brawl enthusiasts nearby," according the app's website. It encourages users to insult their matched opponents with this pro-tip: "tell your match what you don't like about their picture." The fight's location and time is also publicly broadcasted so other users can come and watch the melee, according to the website.

Democratic Presidential Candidates Tackle Wall Street (WSJ)
Hillary Clinton said Friday she isn’t beholden to Wall Street and would stand up for tougher regulations, rejecting suggestions that she is compromised by the speaking fees and donations she has received from financial firms over the years. At a candidate forum hosted by MSNBC, Mrs. Clinton brushed aside questions from moderator Rachel Maddow about her ties to Wall Street firms she represented as a former senator from New York. “Anybody who thinks that they can influence what I will do doesn’t know me very well,” Mrs. Clinton said.

Meet the 29-Year-Old Who Was, Until Today, a Secret Megabillionaire (Daily Intel)
For years, Christy Walton, the widow of Walmart heir John T. Walton, was considered the richest woman in the world. The consensus gossip in plutocratic sewing circles was that Ms. Walton had inherited the bulk of her husband’s vast estate when he perished in a plane crash ten years ago. But according to court documents obtained by Bloomberg [Friday] morning, the late Walton left half of his then-$17 billion fortune to charity, a third to his son Lukas Walton, and the rest to his wife.

China regulators to allow IPOs to resume (Reuters)
China's securities regulator said on Friday it would allow the resumption of initial public offerings in China, lifting a suspension put into effect in July as regulators desperately tried to slow a devastating stock market crash.

Activist stampede pushes board directors into shareholders' arms (Reuters)
The rising power of activist shareholders has added a new responsibility to the role of board director at a publicly traded company: investor relations. From JPMorgan Chase & Co (NYSE: JPM) to Microsoft, and Johnson & Johnson to Apache Corp., board directors across North America have increasingly begun serving as a bridge between institutional investors and corporate management teams.

50 Cent Says That Bullet Lodged in His Tongue Is Great for Oral Sex (US)
When asked about the inspiration behind his new single, “9 Shots,” the rapper, 40, opened up about a notorious shooting incident he was involved in before his career took off, when he was shot by nine bullets. And one bullet, well, gave the “Candy Shop” singer a special touch. “It’s great for oral sex, this thing in my mouth,” the rapper, touching his tongue, told Julie Walters.

Related

Opening Bell: 1.12.16

Oil; Rate hikes; VW CEO offended by suggestion there are ethical issues at VW; "Tinder’s Sean Rad wants you to know he’s not a jerk"; and more.

Opening Bell: 12.03.12

Fiscal Cliff Talks At Stalemate (WSJ) Leading figures on both sides doubled down on their positions in interviews that aired Sunday, and they blamed each other for the current standoff, reflecting the talks that House Speaker John Boehner (R., Ohio) told "Fox News Sunday" have gone "nowhere." Treasury Secretary Timothy Geithner, speaking on the same program for the Obama administration, suggested Republicans needed to take a breather from negotiations but would ultimately agree to raise tax rates—a key White House demand that is part of its push to raise $1.6 trillion in taxes over 10 years. "It's obviously a little hard for them now, and they're trying to figure out where they go next, and we might need to give them a little time to figure out where they go next," Mr. Geithner said. Geithner Joins Boehner to Trade Blame on Fiscal Cliff Talks (Bloomberg) “There’s not going to be an agreement without rates going up,” Geithner said in a taped interview that aired Sunday on CNN’s “State of the Union.” Republicans will “own the responsibility for the damage” if they “force higher rates on virtually all Americans because they’re unwilling to let tax rates go up on 2 percent of Americans.” Clock Ticks For SAC Investors (WSJ) Seventy-five days remain until Feb. 15, the date by which investors must tell SAC whether they want to pull money from the firm during the next redemption period...Some investors already decided to pull out. French bank Société Générale SA, which has client money in SAC through its Lyxor asset-management arm, has put in a request to pull its money from the firm, according to people familiar with the matter. It is unclear how much money Lyxor has in SAC. Many, however, said they would reserve judgment, at least for now. Ironwood Capital Management, a San Francisco-based investment firm with client money in SAC, has been in touch with investors about the position and is monitoring the situation, said a person familiar with the firm. Last week, a unit within Morgan Stanley's MS +0.06% asset-management arm that has client money with SAC sent a note telling employees it would monitor the situation and be in touch frequently with SAC, according to a person familiar with the bank...Greycourt & Co., Inc., a Pittsburgh-based firm that manages about $9 billion for wealthy families, says it is sticking with SAC. Greycourt cited the stellar long-term returns of the firm, what it says is a robust compliance staff at SAC, Mr. Cohen's promise to cover any penalties himself and a belief that the firm's investment portfolio would be well-protected, even if it eventually faces charges. "The SAC portfolio is liquid enough that I'm not terribly concerned," says Gregory Curtis, Greycourt's chairman. "I very much hope that [Mr.] Cohen hasn't been behaving badly, but either way I'm not too concerned about our client positions." UK’s Euro Trade Supremacy Under Attack (FT) The City of London should be deposed as the euro's main financial center so the single currency club can "control" most financial business in the euro zone, France's central bank governor has said. Christian Noyer of the Banque de France said there was "no rationale" for allowing the euro area's financial hub to be "offshore", in a blunt assessment that will fan UK concerns over EU rules being rigged against it. "Most of the euro business should be done inside the euro area. It's linked to the capacity of the central bank to provide liquidity and ensure oversight of its own currency," Mr Noyer told the Financial Times while touring Asia to promote Paris as a renminbi trading center. "We're not against some business being done in London, but the bulk of the business should be under our control. That's the consequence of the choice by the UK to remain outside the euro area." Zoe Cruz trying to make a return to high finance, has reconciled with John Mack (NYP, earlier) Sources say Cruz has reconciled with her former boss Mack, who helped fuel her rise within their firm before their falling out. He has been helping his one-time protégée in her efforts to land at a buyout firm such as KKR. Mack also has been a shoulder for Cruz to lean on as she copes with the split from her husband Ernesto Cruz...[who] was once reprimanded by his superiors in the mid-2000s for frolicking in a hotel pool in Midtown after a company Christmas gala with a group of female assistants, according to sources familiar with the situation. SEC Chief Delayed Rule Over Legacy Concerns (WSJ) Internal SEC emails, released to a congressional panel and reviewed by The Wall Street Journal, appear to show how a last-minute intervention by a consumer lobbyist might have helped persuade Ms. Schapiro to change her mind and delay one of the centerpiece measures of the Jumpstart Our Business Startups, or JOBS, Act. In Panicky Russia, It’s Official: End of World Is Not Near (NYT) There are scattered reports of unusual behavior from across Russia's nine time zones. Inmates in a women's prison near the Chinese border are said to have experienced a "collective mass psychosis" so intense that their wardens summoned a priest to calm them. In a factory town east of Moscow, panicked citizens stripped shelves of matches, kerosene, sugar and candles. A huge Mayan-style archway is being built — out of ice — on Karl Marx Street in Chelyabinsk in the south. For those not schooled in New Age prophecy, there are rumors the world will end on Dec. 21, 2012, when a 5,125-year cycle known as the Long Count in the Mayan calendar supposedly comes to a close. Russia, a nation with a penchant for mystical thinking, has taken notice. Last week, Russia's government decided to put an end to the doomsday talk. Its minister of emergency situations said Friday that he had access to "methods of monitoring what is occurring on the planet Earth," and that he could say with confidence that the world was not going to end in December. He acknowledged, however, that Russians were still vulnerable to "blizzards, ice storms, tornadoes, floods, trouble with transportation and food supply, breakdowns in heat, electricity and water supply." Similar assurances have been issued in recent days by Russia's chief sanitary doctor, a top official of the Russian Orthodox Church, lawmakers from the State Duma and a former disc jockey from Siberia who recently placed first in the television show "Battle of the Psychics." One official proposed prosecuting Russians who spread the rumor — starting on Dec. 22. Old testimony may bite Cohen in SEC case (NYP) Steve Cohen’s sworn testimony in another legal skirmish could come back to haunt his $14 billion hedge-fund empire...In 2011, Cohen gave several days of deposition testimony in the civil fraud case, in which Fairfax sued SAC and other firms for allegedly conspiring to drive down its share price. The case was dismissed due to a lack of evidence, but the testimony offers a rare look into Cohen’s views on illegal trading. In his testimony, Cohen called SEC rules on insider trading “vague” and said he doesn’t expect his employees to follow the company’s internal compliance manual to the letter. When asked whether it was “legal or illegal to trade on material nonpublic information,” Cohen said: “It depends on the circumstance.” “So there are circumstances, in your view, in which it is legal . . . to trade on the basis of material, nonpublic information?” asked Fairfax ’s lawyer, Michael Bowe. “Yes,” Cohen said. Among them, he said, is when employees trade in the opposite direction of the nonpublic information they receive. He also said he didn’t expect employees to adhere to the company’s compliance manual in every situation. “See, we don’t operate our firm in absolutes,” he said. “When I look at this manual, I see guidelines.” Morgan Stanley trader probed over trades made while at Goldman (Reuters) Morgan Stanley trader Edward Glenn Hadden is under investigation by regulators at CME Group over trades in Treasury futures four years ago while he was employed by Goldman Sachs, according to a regulatory filing. Hadden is a managing director and head of global interest rates products at Morgan Stanley. Prior to joining Morgan Stanley, Hadden was a partner at Goldman Sachs, and head of government bond trading. Hedge Funds Increase Bullish Bets Most Since August (Bloomberg) Hedge funds increased bullish bets on commodities by the most since August as evidence that China is accelerating outweighed concern that U.S. lawmakers have yet to resolve an impasse over automatic spending cuts and tax rises. Krawcheck, possible SEC head, raises Washington (Reuters) ...many who have worked with her say Krawcheck was a smart, analytical and competent executive who not only knew the business, but was good at building consensus among different units of companies. She helped restore brokerage Smith Barney's reputation at Citigroup and was popular with many of the financial advisers at Merrill Lynch. Schumer and other lawmakers contacted by Reuters did not return calls or requests for comment about meetings with Krawcheck or their thoughts about her. In the end, of course, Krawcheck may not land in Washington at all, two people who know her said. She has had discussions about a variety of roles with several companies, one source said. "She has lots of balls in the air," said the source, who asked not to be named because the conversations were private. "Sallie always has a plan." Bret Easton Ellis mistakenly asks for cocaine on Twitter (DJ) Bret Easton Ellis, famed author of "American Psycho," tweeted a request for cocaine Sunday morning, leaving many to speculate that it was supposed to be a private message...“Come over at do bring coke now,” he tweeted at 3:44AM, stranding his 360,000 followers in a state of bewilderment regarding what the cryptic tweet could possibly mean.