Opening Bell: 11.13.15

Power shifts to bankers at Goldman; Doubleline taking market share from Pimco; Scouts in Silicon Valley; "Official Who Oversaw Public Toilet Closures Caught Peeing In Street"; and more.
Author:
Publish date:
Updated on

Goldman promotions shift power to banking (FT, related)
Goldman Sachs (NYSE: GS) has promoted more managing directors to its banking divisions than its securities unit, in a sign of a shift of power within the Wall Street giant. On Thursday, the bank said that it had anointed 425 new MDs, of which 96 would be in its advisory division, 13 in merchant banking and 103 in securities. During the previous round of MD promotions in 2013, the securities unit dominated, accounting for 91 of 280 elevations, comfortably ahead of banking (51) and merchant banking (eight).

Secretive, Sprawling Network of ‘Scouts’ Spreads Money Through Silicon Valley (WSJ)
Startup investor Jason Calacanis took a $25,000 gamble five years ago on a company almost no one had heard of called UberCab. That investment in what is now Uber Technologies Inc. has ballooned to roughly $110 million. Mr. Calacanis has never said publicly where the money came from: Sequoia Capital (NASD: SEQUX), one of Silicon Valley’s biggest venture-capital firms. Since 2009, Sequoia has funneled millions of dollars to scores of well-connected entrepreneurs, academics and other people known as scouts. Scouts invest the money in startups and keep their eyes and ears open for ideas that Sequoia might like.

A Global Academy’s Crash Course Makes Angels Out of Investors (Dealbook)
Nearly every week, all around the world, wealthy people, self-made business owners and senior executives in a range of industries gather at private clubs, cultural centers or five-star hotels for free, invitation-only angel investing “boot camps” intended to help them size up fledgling business ideas and the people behind them. The events are organized by Angel Labs, a global angel investor academy based in San Francisco whose mission is to widen the influence of angel investing, a field in which the relatively affluent put money into start-ups, usually in the tech industry.

Fed's Fischer Says Waiting to Raise Helped Offset Dollar Harm (Bloomberg)
The Fed’s decision to delay raising interest rates has helped to offset the economic headwinds caused by a strengthening U.S. dollar, Fed Vice Chairman Stanley Fischer said, adding that it “may be appropriate” to raise rates next month.

Noah's Ark theme park in Kentucky to open July 2016 (Reuters)
A controversial Noah's Ark-themed amusement park in Kentucky will open on July 7, 2016 and should attract 1.4 million people annually, the park's founder said on Thursday. Currently under construction in Williamstown, northern Kentucky, Ark Encounter will include a full-sized wooden replica of the ship from the Biblical story of Noah and the great flood. Ken Ham, president and chief executive of Answers in Genesis, the Christian organization behind the project, announced the opening date at a press conference and said the park will be able to accommodate 16,000 guests per day. "It'll certainly be one of the biggest Christian attractions in the world," he said from the site of the park. Because of the perceived high interest in the park, he said attendance will be limited for the first 40 days and nights, tying the opening again to the Noah story, Ham said.

Banks expected to adopt new technologies rather than be overrun (Reuters)
New technology firms are battering all kinds of companies, but banks will remain as financial intermediaries, due to the regulations and duties governments have put on them, says a proponent of the technology behind the bitcoin cryptocurrency. "Regulation keeps them in place. Regulation requires them to perform certain functions," said Mark Smith, chief executive of Symbiont.io, a startup that has emerged from Bitcoin 2.0 and MathMoney f(x) Inc to build a securities trading platform using blockchain technology like that behind bitcoin. Smith predicted that big banks, such as JPMorgan Chase & Co (NYSE: JPM), would adopt new technologies to cut costs for back offices that process loans and match buyers and sellers of securities.

Blackstone to buy about $3 billion in property fund stakes from Calpers (Reuters)
The deal, the largest of its kind, would allow the California Public Employees' Retirement System to sell 43 of its international and domestic funds to Blackstone (NYSE: BX), the two said in separate statements on Thursday.

Gundlach's DoubleLIne: Winning at Pimco's expense? (CNBC)
"We're seeing outflows in the area in the peer group, but DoubleLine is seeing inflows. Through that empirical evidence, we're taking market share," Redell said during an interview at the Schwab IMPACT 2015 conference in Boston. "So we're taking market share from somebody. You can make assumptions on who that is. We're definitely seeing there's an attractiveness to the stability of our management team."

Official Who Oversaw Public Toilet Closures Caught Peeing In Street (HP)
An elected official who announced funding cuts for public bathrooms might be rethinking the issue after he was ticketed for urinating in the street...Burns said he was at a taxi stand in the town of Hamilton when nature called. "I went down a lane to relieve myself and was approached by police, who gave me a £40 fine which I have duly paid," he told the Telegraph. "I am embarrassed by the incident and have apologized." Earlier this year, Burns announced the need to close public toilets throughout the area, a move many residents vehemently opposed.

Related

Opening Bell: 6.3.16

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

Opening Bell: 03.13.12

Bond Trading Revives Banks (WSJ) Gains in the financial firms' fixed-income businesses, which can account for as much as half of revenue, are putting companies including Goldman Sachs Group Inc., Morgan Stanley and the J.P. Morgan unit of J.P. Morgan Chase & Co. on track to report their strongest numbers since the first quarter of 2011, said bankers and analysts. Trade Fight Flares on China Minerals (WSJ) The Obama administration Tuesday intends to escalate its trade offensive against China, a move heavy with political overtones, by pressing the World Trade Organization to force the export giant to ease its stranglehold on rare-earth minerals critical to high-tech manufacturing. The announcement, which will be made by President Barack Obama, marks a new front in the administration's election-year effort to turn up the heat on China, amid competition from the president's potential Republican rivals on the matter. It could also pressure China to respond to the WTO on an issue that is of high importance to a range of manufacturers. The U.S., joined by the European Union and Japan, plans to ask the WTO, the international arbiter of trade practices, to open talks with China over its restrictions on exporting the rare-earth minerals, administration officials said. New York City Tops Global Competitiveness, Economist Report Says (Bloomberg) New York City ranks first among 120 cities across the globe in attracting capital, businesses and tourists, according to an Economist Intelligence Unit report commissioned by Citigroup. London was the second most-competitive city, followed by Singapore, with Paris and Hong Kong tied for fourth place, according to the report, which was released today. Among U.S. cities, Washington, Chicago and Boston made the top 10. The report cited New York’s diverse economy, driven by media, arts, fashion, technology and finance. In 2010, New York was second only to California’s Silicon Valley as a source of venture capital in the U.S., according to the report. Ex-Lehman exec arrested again (Stamford Advocate) Bradley H. Jack, a former investment banking chief at Lehman Brothers and an owner of the most expensive residential property in Fairfield, has been charged for the second time in less than a year with forging a prescription for a controlled substance. Jack, 53, of North Avenue, was charged Friday by Westport police with second-degree forgery in connection with an incident last November when he is said to have forged the date of a prescription for a controlled substance at a CVS pharmacy that was made out to him by a Fairfield doctor. Euro-Zone Ministers Press Spain for a Deal on Deficits (WSJ) Euro-zone finance ministers on Monday pressed a budget plan on Spain—regarded as a key test of ambitious new rules for the currency bloc—that would allow the government some leeway on its budget deficit for this year but would keep a tough deficit target for 2013. The plan would mean Spain would still have to embark on a bruising austerity program over the next two years that would cut nearly 6% of gross domestic product off its deficit. The program would be particularly challenging given Spain's contracting economy and 23% unemployment rate, Europe's highest. Ministers said after the meeting that Spain had agreed to consider the proposal. Greek Students Fight Stray Dogs and Despair Amid College Cuts (Bloomberg) Higher education in Greece, as in much of Europe, has been battered by the recession and austerity measures. Budget cuts of 23 percent since 2009 mean buildings aren’t heated in the winter, schools have slashed faculty salaries and newly hired professors can wait more than a year to be appointed. Students say it’s hard to be hopeful with youth unemployment surpassing 50 percent and protesters seizing university buildings. “People are pessimistic and sad,” said Konstantinos Markou, a 19-year-old law student, speaking in a lobby at the University of Athens, where dogs fought nearby and students say drug dealers and users congregate. “The sadness is all around the air.” Entire Arena Football team cut during pregame meal at Olive Garden (YS) The owner of the Pittsburgh Power fired all 24 members of his team during a pregame meal at an Orlando-area Olive Garden. With AFL players set to strike before the 2012 season opener, owner Matt Shaner reacted first, cutting his entire team hours before kickoff of a game against the Orlando Predators. "Mid-statement, all the players got up and left," former Power center Beau Elliott told the Pittsburgh Tribune-Review. "Every player got up and left while he was still talking. There were 15 to 20 angry, large individuals." Tainted Libor Guessing Games Face Replacement by Verified Trades (Bloomberg) The London interbank offered rate, the benchmark for $360 trillion of securities, may not survive allegations of being corrupted unless it’s based on transactions among banks rather than guesswork about the cost of money. “The methodology used to formulate Libor is totally unsuitable for the modern world,” said Daniel Sheard, chief investment officer of asset manager GAM U.K. Ltd., which manages about $60 billion. “The British Bankers’ Association needs to come out on the front foot and say ‘this is a system that was appropriate 20 years ago but is no longer appropriate and we are going to change it.’” SEC set to file charges over private trading (FT) The Securities and Exchange Commission is close to filing civil charges tied to the trading of private stocks against at least three executives, making it the first case since regulators began reviewing secondary markets more than a year ago. The fresh scrutiny comes as Congress weighs laws to loosen restrictions on private trading, allowing private groups to have more shareholders and market their stock to a wider range of investors, to make it easier for start-up companies to raise capital and create jobs. It also comes just months ahead of an expected initial public offering for Facebook, which has been the most heavily traded private stock. Ruth Madoff Moves To Greenwich (Greenwich Time) While some Old Greenwich residents said they did not like the idea of Madoff taking up residence in the neighborhood, others shrugged off the news that Madoff was living in town. Neil Lucey, a semi-retired investment banker who has lived in Old Greenwich for 15 years, said he had "no adverse reaction" to hearing Madoff had moved in. Researchers say long-lost Leonardo may have been found (Reuters) Art researchers and scientists said on Monday that a high-tech project using tiny video probes has uncovered evidence that a fresco by Renaissance master Leonardo da Vinci lost for five centuries may still exist behind a wall of Florence's city hall...Researchers used tiny, medical-style endoscopic probes and other high-tech tools inserted through existing cracks in the outer wall holding the Vasari fresco and took samples of substances. "We found traces of pigments that appear to be those known to have been used exclusively by Leonardo," said Maurizio Seracini, an engineer and expert in art diagnostics who has been on the trail of the "Lost Leonardo" for three decades. "These data are very encouraging," he said, adding that one black pigment found was believed to be of the same type used by Leonardo on the Mona Lisa.

Opening Bell: 06.11.12

Nasdaq CEO Lost Touch Amid Facebook Chaos (WSJ) At the end of Facebook's disastrous first day of trading May 18, the phone in Robert Greifeld's New York office rang. It was Mary Schapiro, head of the Securities and Exchange Commission, wanting an explanation from the chief executive of Nasdaq OMX Group for the epidemic of glitches and delays in one of the most anticipated initial public offerings ever. Mr. Greifeld couldn't talk. Having monitored the rocky process from Silicon Valley, where he had gone to join Facebook executives in remotely ringing the market's opening bell, he concluded the worst problems were fixed and caught a noon flight back to the East Coast. So, marooned for almost five hours in business class with a phone he says didn't work, he didn't realize that continuing breakdowns at his exchange had left countless investors not knowing how many Facebook shares they had bought or sold and at what price, nor did he know the SEC chief wanted to reach him. Three weeks later, Mr. Greifeld still isn't sure why technology systems failed during the crucial IPO. Nasdaq's failure to see the problem coming is something its engineers are still dissecting. "You wake up, you turn around, and there's a black or dull spot," Mr. Greifeld said in an interview, sucking on Life Savers candy at a conference table in his office. "You can't get away from it." Spain’s Bailout Gives Rajoy Best Chance To Fix Banks (Bloomberg) Spain’s request for as much as 100 billion euros ($125 billion) of European bailout funds may provide the country with enough money to shore up its banking system after three failed attempts in as many years. “Now that they have this money, it will hopefully finally be possible to recognize all the hidden losses and clean up the system,” Luis Garicano, a professor at the London School of Economics, said in a phone interview. The amount sought is about 2.7 times the funds deemed necessary for Spanish banks by the International Monetary Fund in a report released June 8 and five times the total requested by the Bankia group, the country’s third-biggest lender, to cleanse its balance sheet. Spain's economic misery will get worse this year despite bailout request, prime minister says (NYP) A day after the country conceded it needed outside help following months of denying it would seek assistance, Rajoy said more Spaniards will lose their jobs in a country where one out of every four are already unemployed. "This year is going to be a bad one," Rajoy said Sunday in his first comments about the rescue since it was announced the previous evening by his economy minister. IPOs Dry Up Post Facebook (WSJ) In the aftermath of Facebook's botched trading debut, the IPO market has gone three weeks without an offering, the longest drought in five months. It is the slowest stretch in initial public offerings since a four-week span at the end of 2011 and the beginning of this year, according to data from Ipreo. Greece Threatens Wall Street Jobs In Third Trading Plunge (Bloomberg) For a third consecutive year, revenue from investment banking and trading at U.S. firms may fall at least 30 percent from the first quarter, Richard Ramsden, a Goldman Sachs analyst, said in a note last week. Greece, which gave English the word “cycle,” has been the main reason each year that the second quarter soured after a promising first three months. Nickelback Review Goes Viral (Poynter) Music critic Josh Gross has written hundreds of stories about bands, but none has brought him as much attention as the brief he wrote this week about Nickelback’s upcoming appearance in Idaho, where Gross writes for the Boise Weekly. He summarizes the response: "In the past day, I have been told that I am a genius, a king amongst men and a hack that could be easily outdone by a one-armed cat. I should alternately win the Pulitzer and forcibly insert 45 pickles into my bum. There has been little middle ground. Why? Because I had the audacity to point out that seeing Canadian “rock” band Nickelback at the Idaho Center may not be the best use of one’s $45." Gross wrote of the Nickelback: "You can spend $5 to go see Nickelback this week. Or you could buy 45 hammers from the dollar store, hang them from the ceiling at eye level and spend an evening banging the demons out of your dome...$45 is also enough to see Men In Black III five times, buy a dozen Big Macs, do 10 loads of laundry or so many other experiences as banal and meaningless as seeing Nickelback but come without actually having to hear Nickelback. But if you must, the band is playing The Idaho Center on Wednesday, June 13, at 6PM tickets start at $45." Dimon Faces Washington Grilling Over Trading Debacle (Reuters) The Senate Banking Committee has asked Dimon to come prepared Wednesday to provide "a thorough accounting of the trading losses," a committee aide said. Senators will also ask what he knew about the risks involved in the trading strategy. Fed Colleague Backs Dimon (WSJ) "I do not think he should step down," Lee Bollinger said in an interview with The Wall Street Journal. He said Mr. Dimon appears to have done nothing wrong, that critics attacking the Fed have a "false understanding" of how it works, and that it is "foolish" to say Mr. Dimon's presence on the New York Fed board creates an appearance of a conflict when the law requires bankers to serve on such boards. Private lunch with investor Warren Buffett sells for $3.5 million (WaPo) The previous four winning bids have all exceeded $2 million with records set every year. Last year’s winner, hedge fund manager Ted Weschler, paid $2,626,411. India Could Be First BRIC to Lose Investment Grade: S&P (Reuters) Standard & Poor's said on Monday that India could become the first of the so-called BRIC economies to lose its investment grade status, sending the rupee and stocks lower, less than two months after cutting its rating outlook for the country. "Slowing GDP growth and political roadblocks to economic policymaking are just some of the factors pushing up the risk that India could lose its investment-grade rating," the ratings agency said in a statement issued Monday on a report dated June 8. Town Considers Fines For Cursing (WSJ) Mimi Duphily was hanging baskets of pink geraniums on antique street lamps downtown for the Middleborough Beautification and Activities Group when she noticed something else that needed cleaning up—citizens' mouths. "The cursing has gotten very, very bad. I find it appalling and I won't tolerate it," said Ms. Duphily, a civic leader in the otherwise quiet New England community, which calls itself the Cranberry Capital of the World. "No person should be allowed to talk in that manner." Soon, Middleborough residents who do could risk a $20 fine. Ms. Duphily, 63 years old, tried scolding the cursers—whom she describes as young people shouting the "F word" back and forth—with a stern, "Hey kids, that's enough!" Then she conferred with the Beautification and Activities Group, which informed the Middleborough Business Coalition, which then called a summit with Middleborough Police Chief Bruce Gates, who now, in his sworn role, is trying to stomp out swears.

Opening Bell: 04.05.13

U.S. Economy Adds Just 88,000 Jobs (WSJ) U.S. employers added jobs at the slowest pace in nine months in March, suggesting weakening economic growth as higher taxes and government spending cuts start to have an impact. Employers added 88,000 jobs last month, the Labor Department said Friday. The unemployment rate, obtained by a separate survey of U.S. households, fell one-tenth of a percentage point to 7.6%, largely because of people dropping out of the work force. Economists surveyed by Dow Jones Newswires expected nonfarm payrolls to rise by 200,000. Obama Budget to Include Cuts to Programs in Hopes of Deal (NYT) In a significant shift in fiscal strategy, Mr. Obama on Wednesday will send a budget plan to Capitol Hill that departs from the usual presidential wish list that Republicans typically declare dead on arrival. Instead it will embody the final compromise offer that he made to Speaker John A. Boehner late last year, before Mr. Boehner abandoned negotiations in opposition to the president’s demand for higher taxes from wealthy individuals and some corporations. Congressional Republicans have dug in against any new tax revenues after higher taxes for the affluent were approved at the start of the year. Big inflows into bonds undercut the "Great Rotation" (Reuters) Big names like Pacific Investment Management Co (PIMCO), DoubleLine, Loomis Sayles and TCW have seen their main bond funds take in an aggregate total of roughly $5 billion during January and February. Vanguard's indexed Total Bond Market portfolios have received over $5.6 billion for the same period, according to the latest data provided by Morningstar. More broadly, while U.S. funds that invest in stocks have gained $78.88 billion in new cash so far this year amid the U.S. stock market's run-up, taxable bond mutual funds have garnered roughly the same - $76.41 billion, according to data from Thomson Reuters' Lipper service. Finding a Rate That’s Fairer Than Libor (NYT) Mr. Gensler would like to develop an alternative and points to two options. One would essentially be dependent on the Federal Reserve’s setting of the federal funds rate — the rate at which it will lend to banks. The other would be based on rates charged on secured loans. In each case these are real markets, at least in dollar-based transactions. He would like to phase in one of them as a replacement for Libor. Autonomy deal debacle takes toll at HP (FT) Hewlett-Packard’s chairman and its longest-serving directors resigned from their positions on Thursday in a delayed reaction to last year’s disastrous $8.8bn writedown relating to the company’s $11bn acquisition of Autonomy. Ray Lane will be succeeded as chairman temporarily by Ralph Whitworth until a permanent replacement is identified. Mr Whitworth, an activist investor who joined the board as an independent director in 2011, is HP’s fifth chairman in a decade. Argentina's Cristina Kirchner 'is an old hag' (Telegraph) Uruguay's President Jose Mujica has been left red-faced after apparently saying his Argentine counterpart Cristina Kirchner was "an old hag" in remarks picked up by an open microphone. ... "This old hag is worse than the cross-eyed man," Mujica was caught saying at the start of a news conference while speaking quietly with another official. El Observador newspaper, which posted the audio on its website, said Mujica was referencing the Kirchners and did not realise that the microphones were already on. Nestor Kirchner died suddenly of a heart attack in 2010 and had a lazy eye. Millionaires Got $80 Million in Jobless Aid in Recession (Bloomberg) The U.S. government paid almost $80 million in unemployment benefits during the worst of the economic downturn to households that made more than $1 million, including a record $29.9 million in 2010, tax records show. Almost 3,200 households -- about 20 percent of them from New York -- that reported adjusted gross income of more than $1 million received jobless-insurance payments averaging $12,600 in 2010, the latest year for which figures are available, according to IRS data compiled by Bloomberg. Those payments outpaced the total incomes for about 25 million U.S. households. Wells Hit on Pace of Mortgage Relief (WSJ) New York's top prosecutor is raising concerns about the pace of relief provided to the state's mortgage borrowers by Wells Fargo WFC -1.38% & Co. under a landmark $25 billion settlement, in the latest sign of dissatisfaction with the foreclosure-related legal remedies agreed to by banks and state and federal officials. "We are concerned that Wells Fargo is underperforming compared to other banks," said Attorney General Eric Schneiderman. "By identifying this pattern early, there is still time to address this issue and increase activity so that Wells's customers will be afforded meaningful assistance to keep their homes." Stephen Friedman to Retire From Goldman Board (DealBook) A onetime leader of Goldman who worked at the firm for nearly 30 years, Mr. Friedman is stepping down on May 22, the day before Goldman’s annual shareholder meeting. He will be replaced by Adebayo O. Ogunlesi, a well-known figure on Wall Street who joined the board last fall. ... Upon stepping down from the helm of Goldman in 1994, Mr. Friedman dismissed rumors that he was in poor health. “Only on Wall Street,” he told The New York Times at the time, “do people think it bizarre that I don’t want to spend half of my day on the telephone and the other half on an airplane.” Historical Echoes: Central Bank and Paper Money Innovator Given Death Sentence for His Efforts (Liberty Street Economics) In 1668, but still: watch out Bernanke. University of Rhode Island campus gunman scare may have been sparked by 'Humans vs. Zombies' game A police probe revealed that there never was a gun or active shooter on the Kingston campus, and that no one was ever in danger. However, Nerf guns were uncovered during a room-by-room search of Chafee Hall, which is where the incident started. The toy guns, which blast out foam balls or darts, are used in a game called “Humans vs. Zombies,” campus police Major Stephen Baker told WPRI. On Thursday, a student group was in the middle of a week-long round of the game, which is an extreme version of tag popular on college campuses across the country.

Opening Bell: 5.18.16

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: 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.