Opening Bell: 1.26.16

Paulson props up his own firm; AIG plans to slim down; Dimon and Blankfein go from billionaires to millionaires; Puerto Rican man 'plays poker' at his own wake; and more.
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JPMorgan Pays $995 Million to Settle Ambac Lawsuits (Bloomberg)
JPMorgan Chase & Co. agreed to pay almost $1 billion to resolve claims by Ambac Financial Group Inc. that it was duped into insuring mortgage bonds backed by shoddy loans, clearing the way for approval of a larger settlement over similar allegations.

Paulson Pledges Personal Holdings to Back Firm After Assets Fall (Bloomberg)
The billionaire pledged his personal investments in four of his firm’s hedge funds as additional collateral for a credit line Paulson & Co. has had with HSBC Bank USA for at least five years, according to a filing last month with the state of New York. The holdings will also serve as guarantee for a new personal line of credit for Paulson.

AIG Outlines Plans to Slim Down Amid Investor Pressure (WSJ)
American International Group Inc. will sell its broker-dealer network, conduct an initial public offering of its mortgage-insurance unit and more aggressively cut costs, Chief Executive Peter Hancock said in a strategy update Tuesday, as pressure from investor Carl Icahn grows. AIG also said it plans to return at least $25 billion over the next two years to shareholders in the form of share buybacks and dividends, funded by divestitures, operating performance and other things. The amount is higher than some analysts expected and above the $20 billion Mr. Icahn pushed for.

Hedge funds betting against China eye 'Soros moment' (Reuters)
A handful of mainly U.S.-based macro hedge funds have led bets against China's yuan since late last year and the coming weeks should tell how right they are in predicting a devaluation of between 20 and 50 percent. Since at least last September, Texas-based Corriente Partners, which made hundreds of millions of dollars foreseeing Europe's debt crisis, has been accumulating tailored "low delta" options - essentially bets with long odds - that provide for an up to 50 percent fall in the yuan...That has prompted comparisons with the victories of George Soros-led funds over European governments in the early 1990s. Chinese state media on Tuesday warned Soros and other "vicious" speculators against betting on yuan falls.

Dead man's hand: Puerto Rican man 'plays poker' at his own wake (UPI)
The family of Henry Rosario Martinez, 31, contacted the Eternal Light Funeral Home in Barceloneta after his Jan. 19 death and asked that the man's remains be embalmed, dressed and seated at a poker table during his wake. "It's the first time we did this here, but we take it as something normal, because they have done these things in other parts of the island," funeral home owner Jose Mendelez told EFE. Martinez's wake included poker games with the corpse seated at the table and friends and family posing for pictures with the deceased.

Tyco Deal Adds to U.S. Tax Exodus (WSJ)
Johnson Controls, an industrial-systems and battery maker whose Milwaukee roots stretch back to 1885, said Monday it will merge with Tyco International PLC and take on Tyco’s Irish tax address. The deal, valued at roughly $14.4 billion, is a so-called inversion that should allow Johnson Controls to lower its tax rate over time.

Stock market slump has made these execs ex-billionaires (NYP)
Twenty US execs, including GoPro Chief Executive Nick Woodman and Valeant boss Michael Pearson, have fallen out of the coveted 10-figure net worth echelon, according to Forbes, which tracks the net worth of the wealthiest in real time...Other US executives demoted from 10-figure status: Jamie Dimon, chairman and chief executive at JPMorgan Chase and Lloyd Blankfein, chairman and chief executive at Goldman Sachs.

Mohamed El-Erian warns about a day of reckoning (CNBC)
Allianz Chief Economic Adviser Mohamed El-Erian said Tuesday the world economy is at the end of the era of borrowing growth and profits from the future in the form of easy monetary policies. "Either we validate the financial asset prices and growth faster, or alternatively we will slip into a global recession with financial disorder," El-Erian told CNBC's "Squawk Box." He put a timetable of about three years on the outcome. "The path we're on right now — and that we've been on for a while— is ending," the former Pimco co-CEO said, advocating central banks step back and allow economies to determine their own futures.

Sumo Militia Man Dares Chris Christie To Match We'd Pay To See (HP)
Kelly Gneiting, now encamped with the Bundy militia at Malheur National Wildlife Preserve in Oregon, issued one bizarre proposition to Republican hopeful and New Jersey Gov. Chris Christie: Win just one of 10 sumo matches against him, and the group will disperse. But if Christie loses all 10, well, ya gotta listen above.

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Opening Bell: 04.09.12

JPMorgan Trader Iksil Fuels Prop-Trading Debate With Bets (Bloomberg) Iksil’s influence in the market has spurred some counterparts to dub him Voldemort, after the Harry Potter villain. He works in London in the bank’s chief investment office, which has assembled traders from across Wall Street to its staff of 400 who help oversee $350 billion in investments. While the firm describes the unit’s main task as hedging risks and investing excess cash, four hedge-fund managers and dealers say the trades are big enough to move indexes and resemble proprietary bets...The trades, first reported by Bloomberg News April 5, stirred debate among U.S. policy makers over the Easter-holiday weekend as they wrangle over this year’s implementation of the so-called Volcker rule, the portion of the Dodd-Frank Act that sets limits on risk-taking by banks with government backing. Taking Measure Of Citigroup And Bank Of America (NYT) Bank of America shares are up 66 percent this year, while Citigroup has risen 33 percent, amid the broader rebound in financial stocks. After staying out of the spotlight and earning $21 billion over the last two years, Citigroup’s potential problems are gaining attention again...At Barclays, the analyst Jason Goldberg said he was shocked when Citigroup did not get the go-ahead from the Fed, adding, “We had run mock stress tests with Citi passing by a fair amount.” Just as surprising, he added, has been Bank of America’s surge this year. Its performance has been a far cry from last year, when Bank of America’s stock, which closed at $9.23 on Thursday, was flirting with $5, and questions about whether it had enough capital were mounting. “If you asked me in January whether this thing would be up 66 percent, I’d have said you’re crazy,” Mr. Goldberg said, referring to Bank of America’s stock performance this year. A 'Fat Cat' With The President's Ear (WSJ) When President Barack Obama attacked "fat-cat bankers on Wall Street" in 2009, Robert Wolf had a ready response. "I said 'Mr. President, I know you think I'm overweight, but I can think of better names to call me,'" Mr. Wolf recalls. "He laughed." Humor and self-deprecation have served Mr. Wolf well in his often conflicting roles as presidential pal and Wall Street power broker. The 50-year-old president of UBS's UBS investment bank has remained a leading voice in the industry while also serving as Mr. Obama's chief Wall Street fundraiser and his current BFF (best friend in finance)...Mr. Wolf plays golf and basketball with the president and he is a frequent visitor to the White House. On vacation in Martha's Vineyard or at fundraising events, the two often bond over sports and their families, since they each have two school-age kids. As if to prove the president wrong about "fat cats," Mr. Wolf says he has lost 20 pounds in the past three months. Willing Banks Find Profits in Legal Trade With Iran (WSJ) As Western sanctions on Iran have grown tighter, some small banks have found a lucrative niche financing what remains of the legal trade with the Islamic Republic. Top-tier financial institutions including Société Générale SA GLE.FR -0.74% and Rabobank Group have stepped back from business with Iran in recent months, citing increased political risk and logistical hassles that attend even legal trade with the country. As a result, the remaining players are commanding higher fees and offering increasingly complicated services. Like Russia's First Czech-Russian Bank LLC and China's Bank of Kunlun Co. Ltd, they are typically small, obscure financial institutions often based in countries historically friendly to Iran. The firms and other intermediaries still brokering these trades are charging more than 6% per transaction for legitimate trade deals with Iran, on top of traditional banking fees, according to traders and bankers knowledgeable with the process. That is as much as triple the fees typically charged by Arab Gulf banks two years ago, before the United States and European Union significantly stiffened sanctions, according to Iranian businessmen. Easter Bunny Arrested (KTLA) An Easter Bunny was arrested this week after police found he was carrying around more than Easter eggs and candy. Joshua Lee Bolling, 24, was arrested and charged on Thursday with illegally possessing prescription narcotics. Police arrested Bolling after businesses at the Piedmont Mall in Danville, Virginia complained that the Easter Bunny was acting suspicious. "His suspicious behavior took place while he was on breaks and not during his contact with children," a police release said. UBS Faces Billionaire Olenicoff in Lawsuit Over His Tax Felony (Bloomberg) and billionaire Igor Olenicoff are scheduled to clash in court today over his claim that the bank bears blame for his failure to declare $200 million in offshore accounts on U.S. tax returns. Olenicoff, 69, a real-estate developer, pleaded guilty in 2007 to filing a false tax return, admitting he didn’t tell the Internal Revenue Service about his offshore accounts for seven years. He was sentenced to two years’ probation and ordered to pay $52 million in back taxes, fines and penalties. In 2008, he sued Zurich-based UBS, the largest Swiss bank, claiming it traded excessively in his accounts, engaged in racketeering and committed fraud by not telling him he owed U.S. taxes. He seeks as much as $1.7 billion in damages. Arguments on the bank’s motion to dismiss the case are set for today before U.S. District Judge Andrew Guilford in Santa Ana, California. Markets at the Start of a More Significant Downturn Says Marc Faber (CNBC) “The technical underpinnings of the market have been a disaster in the last couple of weeks,” Faber said on the sidelines of the Maybank Invest Asia conference. “The number of new highs have declined, the volume has been poor, insider sales just hit a record.” Faber said the weakness in economically sensitive stocks such as mining and industrial goods was particularly “disturbing.” Agencies At Odds Over New Ratings (FT) The latest example came this month when a near-$800 million bond deal backed by U.S. prime mortgages was sold to investors with triple-A ratings — provided by Standard & Poor’s and DBRS, a smaller competitor based in Canada — on some tranches. Fitch Ratings issued a statement saying it would not have rated the bonds triple A. It said it provided “feedback” on the transaction to the arranger, Credit Suisse, and “was ultimately not asked to rate the deal due to the agency’s more conservative credit stance”. Steven Vames, a Credit Suisse spokesman, said it was common for an issuer to engage multiple rating agencies to look at a deal and ultimately choose a subset of those agencies to rate it. In March, Moody’s said: “Some recent cases have come to market for which we believe increased risk has not been adequately mitigated for the level of ratings assigned by another agency.” In particular, Moody’s faulted ratings issued by S&P, Fitch and DBRS on asset-backed deals. For Big Companies, Life Is Good (WSJ) An analysis by The Wall Street Journal of corporate financial reports finds that cumulative sales, profits and employment last year among members of the Standard & Poor's 500-stock index exceeded the totals of 2007, before the recession and financial crisis. UK Cruise Retraces Titanic's Ill-Fated Voyage (Reuters) Descendants of some of the 1,500 people killed when the Titanic sank a century ago were among the passengers on a cruise ship that set off from Britain on Sunday to retrace the route of the liner's ill-fated voyage. Some donned period costume, including furs and feathered hats for women and suits and bowler hats for men, to board the MS Balmoral at Southampton on the southern English coast. The world's most famous maritime disaster has fascinated people ever since, explaining why passengers from 28 countries were prepared to pay up to 8,000 pounds ($13,000) each to be a passenger on the memorial cruise organized by a British travel firm. The Balmoral will follow in the wake of the Titanic, sailing near Cherbourg in France and then calling at Cobh inIreland before arriving at the spot where the Titanic went down...Passenger Jane Allen, whose great-uncle died on his honeymoon trip on the Titanic while her great-aunt survived, said she did not think it was "ghoulish or macabre" to go on the voyage.

Opening Bell: 10.22.12

Some Investors Open to Higher US Tax to Shave Deficit (Reuters) In recent weeks, Goldman Sachs CEO Lloyd Blankfein and JPMorgan Chase's Jamie Dimon became the latest Wall Street heavyweights to say they would be willing to pay more in exchange for a deal to balance the country's books. AIG's Benmosche On Why Capitalism Still Works (NYM) As its vaguely omnipotent name suggests, American International Group contained a little of everything: a small bank, an airline-leasing company, and a terrifyingly vast array of international companies that underwrote everything from cows in India to satellites orbiting the Earth. To the emergency team that came in following the crises, the impulse was to get rid of everything, to disassemble this Frankenstein monster once and for all. This was the idea behind Project Destiny. Benmosche had a different one. “Say you’re sitting there, you have gangrene,” he says to me one morning, before I’ve even had coffee. “And I don’t have any instruments. All I have is an ax. And I’ve gotta grab the ax and cut that sucker off. But the ax is dull. And it makes a mess. That’s what they did, in the beginning. They whacked that sucker off. And they kept hacking. But there was value in the body that was left. The body could produce things. And it owed people. What are you going to do, kill the body? Want it to be so ugly and deformed that it could never live? No! What you do is you clean it up, make it more cosmetic. Maybe we can help them get a prosthesis. Maybe they can run in the Olympics one day, like a double amputee, as we saw. Can you imagine that? A double amputee running in the race.” Goldman Bonus System Corrupted In 2005, Smith Book Says (Bloomberg) Before 2005, the company determined workers’ annual awards “not just on how much business you’d brought in, but also on how good you were for the organization,” Smith, a former vice president, writes in “Why I Left Goldman Sachs: A Wall Street Story.” “From 2005 until the present day, the system has become largely mathematical: you were paid a percentage of the amount of revenue next to your name,” a figure that could vary from 5 percent to 7 percent, wrote Smith, 33, without saying how he learned about such a change. “The problem with the new system was that people would now do anything they could -- anything -- to pump up the number next to their name.” 129 Minutes With Goldman Turncoat Greg Smith (NYM) Why I Left Goldman Sachs may disappoint those who hoped for a collection of sordid Wall Street bacchanalia. Smith saw no financial crimes in progress at the bank, and his tales of Goldman life are mostly anodyne workplace micro-dramas told with wide-eyed breathlessness. The book’s most lurid revelation is that Smith once saw Goldman CEO Lloyd Blankfein naked at the company gym. With the book done, Smith says he’s looking forward to resuming a normal life, possibly as a speaker and pundit. Among other things, he’d like to meet a woman. “I’m not anti-capitalism at all,” he says. “I want Goldman to be admired. I just don’t like this notion that ethics and capitalism are different things.” Argentina orders evacuation of ship seized by hedgie Paul Singer as collateral for unpaid bonds (AP) Argentina announced the immediate evacuation Saturday of about 300 crew members from the ARA Libertad, a navy training ship seized in Africa nearly three weeks ago as collateral for unpaid bonds dating from the South American nation's economic crisis a decade ago. Only the captain and a few other members of the crew of 326 sailors will remain on the three-masted tall ship, a symbol of Argentina's navy. Girl, 9, in black and white costume shot as relative mistakes her for skunk (NYDN) A 9-year-old girl was shot outside a Halloween party Saturday night in Western Pennsylvania, taking a bullet to the shoulder from a male relative who mistook her for a skunk. The condition of the girl wasn’t released Sunday, but police in rural New Sewickley Township said she was alert and talking as she was flown to a hospital in Pittsburgh, 30 miles away. Neither the girl nor her relative was identified. She was spotted on a hillside around 8:30 p.m. wearing a black costume and black hat with a white tassel, according to the Beaver County Times. The relative who accidentally injured her was carrying a shotgun. Police Chief Ronald Leindecker said the man wasn’t under the influence of alcohol, and was unsure whether he would be charged. Prince Alwaleed Praises Pandit for Citigroup Crisis Handling (Bloomberg) Saudi billionaire Prince Alwaleed bin Talal praised Vikram Pandit for his handling of the financial crisis while chief executive officer at Citigroup, saying he helped position the bank for further growth. “Many companies like HSBC, Barclays and Standard Chartered shrank and went back to their roots,” Alwaleed, the largest individual investor in Citigroup, said today at a conference in Dubai. “Citigroup never blinked on that. It’s the only global bank at the moment and really the potential is there,” 57-year- old Alwaleed said, adding that Pandit did a “good” job as CEO. West Coast Will Be In 'Colossal' Mess In 5 To 10 Years, Says Marc Faber (CNBC) Faber argued that the political systems in place in the West would allow the debt burden to continue to expand. Under such a scenario of never-ending deficits, the Western world would rack up huge deficits. One day, the system would break, he said. “Eventually, you have either huge changes occurring in a peaceful fashion through reforms, or, usually, through revolutions,” he said. The U.S. is getting closer to such a revolution, he said, as is Europe. Vampire Pong: Ex-Goldman Banker Takes On A Pro (Fortune) Halfway through a recent match, set up by Fortune between Smith and Wally Green, one of the top pros in the country, Smith crouches, leans his head toward the table and serves. The pro swings and misses. Ace....Smith brought own paddle in a soft vinyl case to the match, which was held at Spin, a club in New York. The best part of Smith's game is his serve, which is a deceptive spinning wonder that appears to be going much faster than it is. His first serve of the match, like a number of others, goes right by Green. Smith is up 1-0. "That's a very good serve," says Green. Baby Walrus Adapts To Life In Brooklyn (NYT) A team of 15 is caring for him around the clock. His favorite toy is a plastic bucket. He has taken swimmingly to a large pool. And on Friday, he had his first taste of solid food — surf clams. “He’s hitting every milestone we’re hoping to see,” said Jon Forrest Dohlin, director of the New York Aquarium in Coney Island, Brooklyn, part of the Wildlife Conservation Society. “He still has some issues with his bladder, but they are trending in the right direction. Behaviorally, he’s doing great and we’re feeling good about his progress.” He was describing Mitik, or Mit for short, one of two walrus calves separated from a herd in the Arctic Ocean and orphaned in Alaska in July. The Alaska SeaLife Center took them in and found new homes for each. (The other walrus, Pakak, went to the Indianapolis Zoo.) The New York Aquarium, eager for a young companion for its two older walruses, stepped up, flying a staff member, Martha Hiatt, to Alaska to work with Mit for a month. On Oct. 11, Ms. Hiatt, the aquarium’s behavioral husbandry supervisor, along with a veterinarian, accompanied Mit on a FedEx cargo jet from Anchorage to Newark. The walrus, believed to be about 16 weeks old, stayed in his crate during the six-hour flight. “It was loud,” Ms. Hiatt said of the trip. “He pretty much sang to us the entire time. We stayed with him, talked to him and hosed him off now and then.” [...] much of Mit’s day consists of play, which helps his development and encourages his cooperation during medical procedures and feedings. One of his favorite activities is to scoop up a giant white bucket with holes through it. “He loves to run around with that on his head and vocalize,” Ms. Hiatt said.

Opening Bell: 11.21.12

Germany Hints At More Financing (WSJ) Germany on Wednesday signaled its willingness to provide additional financing for the euro zone's bailout fund and accept lower interest on loans to Athens, in order to get the Greek rescue back on track and free the next tranche of about €44 billion ($56.40 billion) in loans for the euro zone's weakest member. Merkel Sees Chance For Greek Deal Monday (Reuters) "I believe there are chances, one doesn't know for sure, but there are chances to get a solution on Monday," Merkel told the Bundestag lower house of parliament in a debate on the German budget. But the longing for one act, one miracle solution, one truth that means all our problems are gone tomorrow...this will not be fulfilled. What was neglected over years, over decades, cannot be taken care of overnight and therefore we will need to continue to move step by step." H-P Says It Was Duped (WSJ) The technology giant said that an internal investigation had revealed "serious accounting improprieties" and "outright misrepresentations" in connection with U.K. software maker Autonomy, which H-P acquired for $11.1 billion in October 2011. "There appears to have been a willful sustained effort" to inflate Autonomy's revenue and profitability, said Chief Executive Meg Whitman. "This was designed to be hidden." Michael Lynch, Autonomy's founder and former CEO, fired back hours later, denying improper accounting and accusing H-P of trying to hide its mismanagement. "We completely reject the allegations," said Mr. Lynch, who left H-P earlier this year. "As soon as there is some flesh put on the bones we will show they are not true." Analysts Had Questioned Autonomy’s Accounting Years Ago (CNBC) Paul Morland, technology research analyst at broking and advisory house Peel Hunt, told CNBC that he had noticed three red flags in Autonomy’s accounts in the years leading up to the HP acquisition: poor cash conversion, an inflated organic growth rate, and the categorizing of hardware sales as software. London Bankers Become Landlords as Rents Hit Record (Bloomberg) Vivek Jeswani became a landlord by accident when Deutsche Bank AG (DBK) transferred him to New York two weeks after he moved into a new home in central London. Now back in the U.K., Jeswani views the apartment in Baker Street, the fictional home of Sherlock Holmes, as one of his best assets and is about to buy another home to expand his rental business. “There are no other investments as attractive and you’ve got some security if you’ve got an asset you can use yourself,” the 36-year-old risk officer at China Construction Bank Corp.’s U.K. unit said. “There’s a good yield over 5 percent and being in central London, you’ve got demand domestically and internationally.” Trading Charges Reach SAC (WSJ) The hedge funds reaped $276 million in profits and losses avoided based on that information, criminal and civil authorities said—far dwarfing that of any previous insider-trading case. The bulk of the trading profits generated by Mr. Martoma was paid to Mr. Cohen, a person close to the hedge fund said. Fed Still Trying To Push Down Rates (WSJ) Fed Chairman Ben Bernanke suggested that the central bank will keep trying to push down long-term interest rates in 2013, as federal tax and spending policies become a more substantial headwind to the U.S. economy. "We will continue to do our best to add monetary-policy support to the recovery," Mr. Bernanke said at the New York Economic Club, answering a question about how the Federal Reserve would respond to impending spending cuts or tax increases that might restrain economic growth. 'Stiletto Surgery' alters pinky toe for better fit (Fox) These days, some women will do just about anything to fit into their favorite pair of high heels – including surgery. A growing number of women are paying thousands of dollars to surgically alter their feet just to make wearing heels a more comfortable experience. Surgical procedures such as shortening toes, receiving foot injections and even completely cutting off pinky toes are on the rise. “Unless you’ve been there, and you can’t find shoes, and you’re in pain, don’t judge,” said Susan Deming, a patient who recently underwent a toe-shortening procedure. Adoboli’s Fate Decided at Wine Bar as UBS Market Bets Unraveled (Bloomberg) On a cool late summer evening last year in London’s financial district, with the euro-zone crisis worsening and Greece tottering on the edge of default, Kweku Adoboli says he asked the three traders who worked with him at UBS AG’s exchange-traded funds desk to join him for a drink. Adoboli said in a post on his Facebook page that he needed “a miracle” as his bets on the market imploded. That night at a wine bar across the street from their office, Adoboli asked John Hughes, the senior trader on the ETF desk, and two junior traders, what to do. The others decided he should take the blame for billions of dollars in losses and an elaborate web of secret trades in what he called an umbrella account that once held $40 million in hidden profits. “I knew I was going to lose my job anyway, I had already resigned myself to that, so fair enough,” the 32-year-old Adoboli testified last month about the meeting, which the other traders deny took place. Jobless Claims in U.S. Decrease (Bloomberg) Fewer Americans filed applications for unemployment benefits last week as damage to the labor market caused by superstorm Sandy began to subside. Jobless claims decreased by 41,000 to 410,000 in the week ended Nov. 17, the Labor Department reported today in Washington. The number of applications matched the median forecast of 48 economists surveyed by Bloomberg. Soros Buying Gold as Record Prices Seen on Stimulus (Bloomberg) The metal will rise every quarter next year and average $1,925 an ounce in the final three months, or 11 percent more than now, according to the median of 16 analyst estimates compiled by Bloomberg. Paulson & Co. has a $3.66 billion bet through the SPDR Gold Trust, the biggest gold-backed exchange- traded product, and Soros Fund Management LLC increased its holdings by 49 percent in the third quarter, U.S. Securities and Exchange Commission filings show. 'Cannibal Cop' Gilberto Valle planned to to cook up 'some girl meat' on Thanksgiving (NYDN) The "Cannibal Cop" had his own twist for a Thanksgiving dinner this year — cooking up “some girl meat,” prosecutors revealed Tuesday. Gilberto Valle, 28 — who allegedly kept a database of at least 100 women he plotted to rape, cook and eat — planned the freakish feast with one of his online conspirators earlier this year, prosecutors said. “I’m planning on getting me some girl meat,” he wrote to his pal on Feb. 9. “Really tell me more,” responded the friend. “It’s this November, for Thanksgiving. It’s a long way off but I’m getting the plan in motion now,” Valle wrote.

Opening Bell: 02.21.13

Feds Split Over When To Close Cash Spigot (WSJ) Minutes released Wednesday from the Fed's January policy meeting show officials concerned that the current easy-money policies could lead to excessive risk-taking and instability in financial markets. The Fed is buying $85 billion in mortgage and U.S. Treasury securities a month to drive down long-term rates and has promised to keep short-term rates near zero until unemployment improves. Citigroup Chairman Not Pressing Bank Breakup (WSJ) Michael E. O'Neill was among a small group of directors who after the financial crisis urged the company to weigh the pros and cons of splitting up the third-largest U.S. bank, said people familiar with the deliberations. Mr. O'Neill, now chairman, has overseen a management shake-up in the past year and is backing a broad cost-cutting plan. But exploring a breakup is no longer among his top priorities. Mr. O'Neill has concluded that breaking up Citigroup doesn't make sense now, given economic and regulatory uncertainty as well as a host of financial considerations, these people said. Wells Fargo ramps up private equity despite Volcker Rule (Reuters) The fine print of the Volcker Rule is expected to be finalized as soon as this year. Major banks such as Bank of America Corp and Citigroup are already pulling back from private equity investments ahead of the rules. But Wells Fargo is taking a different path. The bank invests in buyouts and venture capital deals largely on its own, with capital only from Wells Fargo itself and some employees. By avoiding equity from outside investors, the bank is considered to be engaging in "merchant banking," an activity that is likely to be exempt under the Volcker Rule, lawyers and people familiar with the matter said. Dimon Defends His Duel Leadership Roles (NYP) JPMorgan Chase CEO Jamie Dimon has no intention of relinquishing his chairmanship, insiders say, despite renewed calls from a group of shareholders to split the roles at the nation’s biggest lender. The American Federation of State, County and Municipal Employees, a granddaddy of public employee unions, as well as New York City and Connecticut pension funds, are pressuring the bank in the wake of its $6 billion “London Whale” trading blunder. The shareholders, which hold about $1 billion worth of bank shares, say the move would help to avoid a repeat of last year’s debacle, which led the board to slash Dimon’s pay in half. JPMorgan officials, though, don’t want to go as far as splitting the roles, saying their boss steered the bank successfully through the financial crisis and is well suited for both jobs. Regulator Weighs Ban For Corzine (WSJ) Two newly elected directors of the National Futures Association plan to push the agency to hold a hearing on the matter, having criticized the response of federal regulators some 16 months after the industry was shaken by the collapse of brokerage MF Global where the former New Jersey governor was chief executive. Shia LaBeouf Pulls Out Of Broadway's Orphans (NYP) Producers announced that LaBeouf parted ways with the show after just a week of rehearsals due to “creative differences,” even though the play’s scheduled to begin previews March 19. But last night LaBeouf, 26, posted e-mail exchanges on Twitter revealing divisions between him and bombastic Baldwin. In a message titled “Creative Differences” LaBeouf posted an e-mail to him from director Dan Sullivan, which reads, “I’m too old for disagreeable situations. You’re one hell of a great actor. Alec is who he is. You are who you are. You two are incompatible. I should have known it. This one will haunt me. You tried to warn me. You said you were a different breed. I didn’t get it.” Russia's Missing Billions Revealed (FT) Russia's central bank governor has lifted the lid on $49 billion in illegal capital flight - more than half of which, he says, is controlled "by one well-organized group of individuals" that he declined to name. Sergei Ignatiev, due to step down in June after 11 years in his post, is seldom outspoken about any issue other than interest rates. But he unburdened himself in an interview with the Moscow newspaper Vedomosti about money leaving the country through the back door, which he said equaled 2.5 percent of gross domestic product last year. "This might be payment for supplies of narcotics...illegal imports...bribes and kickbacks for bureaucrats...and avoiding taxes," he told the daily, which is part-owned by the Financial Times. New York Times Looks To Sell Boston Globe (CNBC) This follows the Times Company's sale of other regional papers as well as the About.com group, as it focuses in on its core asset — the New York Times brand. And with that focus, the publisher is honing in on what's really been working for the company — the New York Times subscription model. The company has retained Evercore Partners to advise on and manage the sale, but won't say who it's already talked to, or how much it thinks the assets are worth. Citi analyst Leo Kulp, who calls this a "positive move," estimates that the segment could fetch about $200 million. The segment generated $395 million in 2012 revenue, which Kulp says implies about $67 million in EBITDA in 2012. He applies a three times multiple — "on the high end of comparable large metro newspaper sales" — to give the paper a $200 million price tag. Herbalife Prez Goes On Offensive (NYP) President Des Walsh, in a conference call, said that “despite what we believe to be unprecedented, unfair and untrue attacks on this company, our business continues to do well.” Deputies: Couple started fighting over man scratching himself (WWSB) According to the Manatee County Sheriff’s Office, Shalamar Petrarca complained to her boyfriend, 30-year-old Ronald Howard, that it was rude and disgusting to be “scratching his testicles” while she was about to eat dinner. She told deputies that Howard began yelling at her, pushed her into the kitchen, causing her to get a scratch on her ankle, then threw her out of the house. Howard told deputies that she punched him in the eye for “scratching his balls”, and the he pushed her through the door in self-defense. Deputies say Howard had no visible injuries, but Petrarca did have a scratch on her ankle.

Opening Bell: 08.15.12

Standard Chartered Faces Fed Probes After N.Y. Deal (Bloomberg) Regulators including the U.S. Treasury, Federal Reserve, Justice Department and Manhattan District Attorney declined attempts at a global settlement, said two people familiar with the matter. A coordinated effort was already in progress before New York’s unilateral deal, announced yesterday by financial regulator Benjamin Lawsky, one of the people said. The agreement doesn’t take into account all of the bank’s alleged violations, including those involving nations such as Sudan, said one of the people, who added that September is the earliest a universal deal may be reached. Paulson Steps Up Gold Bet To 44% Of Firm’s Equity Assets (Bloomberg) John Paulson raised his stake in an exchange-traded fund tracking the price of gold while selling other stocks during the second quarter, leaving his $21 billion hedge fund with more than 44 percent of its U.S. traded equities tied to bullion. Paulson & Co. purchased an additional 4.53 million shares of the SPDR Gold Trust, the firm’s largest position, and bought more shares of NovaGold Resources Inc, according to a Form 13F filed yesterday with the U.S. Securities and Exchange Commission. Goldman Sachs, SkyBridge Among Mitt Romney's Hedge Fund Bundlers (AR) FYI. Brevan Howard Raising Money In U.S. For Currency Hedge Fund (Bloomberg) London-based Brevan Howard filed an Aug. 9 private- placement notice with the U.S. Securities and Exchange Commission to raise an unspecified amount of assets for its Macro FX fund. The $1 billion currency fund is managed by Luke Ding, a former Merrill Lynch & Co. foreign exchange trader who joined Brevan Howard in 2007. Greece Staves Off Default (WSJ) Greece successfully staved off a default on debts owed to the European Central Bank, as more information dribbled out on the parlous state of its economy and banking system. The Greek economy shrank 6.2% year-on-year in the second quarter, European Union statistics agency Eurostat estimated on Tuesday, and senior bankers said more than 20% of loans to the domestic economy are now officially nonperforming. They warned that the problem may overwhelm the sector and derail the country's bailout program. He Whipped, She Snapped (NYP) Frankie Santiago embraced a role as live-in fetish slave to dominating Manhattan investment-banker beau Edward Sonderling, playing out a bondage fantasy similar to college student Anastasia Steele and older Christian Grey in the erotic novel “Fifty Shades of Grey.” But it all took a twisted turn when Santiago, 27, found out Sonderling, 53, had been training his whips on her replacement. The submissive Santiago exploded in a fit of rage, law-enforcement sources said, allegedy shattering Sonderling’s car windshield and bombarding him with dozens of text threats. “If I ever see you with her I will not hold back. I have nothing to lose,” Santiago railed in one text. “I hope she has a disease you catch.” Santiago — who is known in the bondage-domination S&M community as Althea Lyn — was arrested Monday after what sources said was a knock-down, drag-out fight with Sonderling at the East 57th Street apartment where she once did his daily bidding. Santiago and Sonderling — who has the body of a much younger man and is known as King Eddo — were regulars on Manhattan’s BDSM circuit, where Sonderling boasted of being a “whipping aficionado,” said a source who knows the pair. A Horace Mann and Brown graduate, Sonderling runs his own firm, Priority Investors LLC, He declined to comment on Santiago’s arrest and his extracurricular BDSM activities. “I don’t think that I have anything to say about it. Why would I?” he said. Fund Managers Unload Big Banks (WSJ) Some well-known money managers reported significantly reduced stakes in big banks, including J.P. Morgan Chase & Co. and Goldman Sachs Group Inc., as well as food companies such as Kraft Foods Inc. in the second quarter. Billionaire investor George Soros's Soros Fund Management LLC eliminated positions in J.P. Morgan Chase and Goldman, as well as Citigroup Inc., according to a regulatory filing late Tuesday. The investment company also reported a new stake in retailer Wal-Mart Stores Inc. and a 341,000-share stake in Facebook Inc. Goldman executives win dismissal of mortgage, TARP lawsuit (Reuters) Goldman Sachs Group Inc Chief Executive Lloyd Blankfein and other bank officials won the dismissal of a shareholder lawsuit accusing them of tolerating poor mortgage practices and quitting a federal bailout program early to boost executive pay. U.S. District Judge William Pauley in Manhattan said the shareholders failed to show there were "red flags" to put bank directors on notice of "broken controls" in Goldman's mortgage servicing business, including that workers at its Litton unit may have been "robo-signing" documents. Pauley also cited a similar lack of red flags to suggest directors knew Goldman was packaging troubled loans in residential mortgage-backed securities, including loans the bank sold "short" in a bet they would lose value. The judge also said the plaintiffs did not show that directors acted in bad faith in letting Goldman repay $10 billion taken from the Troubled Asset Relief Program early, in June 2009, freeing the bank from restrictions on executive pay. Giuliani: Biden Lacks ‘Mental Capacity’ for VP Job (CNBC) “I've never seen a vice president that has made as many mistakes, said as many stupid things,” he said on “The Kudlow Report.” “I mean, there’s a real fear if, God forbid, he ever had to be entrusted with the presidency, whether he really has the mental capacity to handle it. I mean, this guy just isn’t bright. He’s never been bright. He isn’t bright. And people think, ‘Well, he just talks a little too much.’ Actually, he’s just not very smart.”

Opening Bell: 02.08.13

Barclays CEO’s Ethics Talk Drowns Out Silence on Profit (Bloomberg) Jenkins, who took over after Robert Diamond departed in the wake of the bank’s fine for rigging Libor, is set to reveal the conclusions of his six-month review of the lender’s operations at London’s Royal Horticultural Halls on Feb. 12. While he may cut about 2,000 jobs, pledge to reform culture and reduce pay to boost returns, he’s unlikely to follow UBS AG and eliminate entire business lines, according to investors and analysts. That’s because the securities unit that Diamond built out of the remains of Barclays De Zoete Wedd over the 15 years from 1996 still contributes about half of the lender’s profit. Meredith Whitney Pans New Citi Chief Corbat (NYP) “He didn’t give us an agenda and he didn’t even give us a stamp for when he’s going to give us an agenda, so it left people a little bit uninspired,” she said during an interview with Bloomberg TV yesterday. Deutsche Bank Said to Fire 10 Traders as Banks Retrench (Bloomberg) Deutsche Bank AG fired between 10 and 12 European power and natural gas traders in London as it cuts staff trading physical commodities, two people with knowledge of the matter said. There are at least two traders still unwinding positions as Europe’s biggest lender is reducing trading in physical energy markets, said the people, who asked for anonymity because the information is private. Nick Bone, a company spokesman in London, declined to comment when reached yesterday by phone. Buffett’s Son Says He’s Prepared Whole Life for Berkshire Role (Bloomberg) Protecting Berkshire’s culture “means that I need to make sure that people feel that they’ve been treated fairly, that whatever my dad committed to them remains committed,” Howard Buffett, 58, said in an interview with Bloomberg Television’s Betty Liu, airing today. The younger Buffett is a director of Coca-Cola Co., the world’s largest soft-drink maker, and once was the head of investor relations for Archer-Daniels-Midland Co. He said observing his father has helped him get ready to lead a board that also includes Microsoft Corp. co-founder Bill Gates and Stephen Burke, CEO of Comcast Corp.’s NBC Universal unit. “In a way, I’ve been preparing for it all my life,” Buffett told Liu. “In another way, I’ve been on the Berkshire board now 20 years. That’s a preparation.” Justin Timberlake Named Creative Director of Bud Light Platinum (Billboard) As part of the deal, Timberlake will be charged with providing “creative, musical and cultural curation” for the Bud Light Platinum brand, per a press release announcing the partnership. Additional terms were not disclosed. “Bud Light Platinum brings a refined, discerning aesthetic to beer that plays well with what I'm doing,” Timberlake said in a statement. Monte Paschi says considering legal action to protect business (Reuters) talian bank Monte dei Paschi said on Friday it is considering legal action against anyone who damages its commercial activity or spreads false information about the bank. In a statement, the bank said it had become the target of "attacks of various kinds involving, in certain circumstances, employees, creating considerable problems in the normal course of business. It said it was considering civil and penal action. Audacious Hack Exposes Bush Family Pix, E-Mail (TSG) The hacker also intercepted photos that George W. Bush e-mailed two months ago to his sister showing paintings that he was working on, including self-portraits of him showering and in a bathtub. Another image shows the former president painting at the family’s Maine retreat. Goldman Readies Fund Business For 'Volcker' (WSJ) For 20 years, Goldman wooed clients to invest in its private-equity funds with the security blanket that the bank and its partners went along for the same ride. But that is about to change. The looming "Volcker rule" is expected to sharply reduce the bank's investment in its own funds. That is forcing Goldman to make major changes in a $50 billion business that has reaped big profits for the bank and its employees and clients. Goldman likely will have to shrink the size of its own investment in its funds to just 3% from as much as 37% once the rule is finalized later this summer. The rule, part of the Dodd-Frank financial-overhaul law and named after former Federal Reserve Chairman Paul Volcker, aims to restrict banks from making big bets with their own money. Goldman expects new funds it raises will be considerably smaller. The New York bank also will change the name of the business to avoid referencing its own name. GS Capital Partners and future funds may become "Broad Street," referring to both the firm's old headquarters and its first leveraged-buyout fund launched in 1986, according to people involved in the business. Ex-Tyco chief gets another chance at parole (NYP) Kozlowski was denied parole in April when state officials tossed out his application saying his release was not "compatible with the welfare of society at large." But in a ruling made public today, Justice Carol Huff this week called that decision "an unauthorized re-sentencing" of Kozlowski, adding that it lacked specifics. In making its decision, she said, the parole board must consider other factors beyond the crime including the inmate's institutional record, which the tycoon asserted is exemplary. The Politics Of Chris Christie's Weight (WSJ) The latest chatter about Mr. Christie's heaviness began on the "Late Show With David Letterman," when he pulled out a pastry and began eating as the comic asked whether his frequent jokes about the overweight Republican were offensive. The day after the good-natured stunt, Mr. Christie opened up about his struggles to lose weight. Later, a former White House physician, Connie Mariano, said she worried his weight made him a "time-bomb" at risk of dying in office. Mr. Christie quickly shot back, calling Dr. Mariano a fame-seeking "hack" who didn't know his health history and was needlessly worrying his children. On Thursday, Dr. Mariano, who attended to presidents George H.W. Bush, Bill Clinton and George W. Bush, said she stood by her assessment. "When I see someone of that size, I worry about various medical issues," she said. "It was not meant to be an attack on him personally."

Opening Bell: 6.3.15

Jamie Dimon achieves billionaire status; John Paulson donates 400 mill to Harvard; Libor trader paid brokers for 'help and information'; Man regrets proposing at McDonalds; and more.