Opening Bell: 2.16.16

Banks hire ex-spies; Goldman says sell gold; Octopus mating display canceled over cannibalism fears; and more.
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Spies Who Chased Terrorists Join Banks to Hunt for Rogue Traders (Bloomberg)
Bryon Linnehan spent more than two years chasing bad guys around Iraq as a U.S. military-intelligence officer. Since May, he’s been using skills he honed on the battlefield to monitor electronic communications inside Barclays Plc. Desperate to avoid more costly run-ins with regulators, investment banks are hiring former intelligence professionals like Linnehan to scrutinize virtually all aspects of their employees’ working lives, from how long they take for cigarette breaks to which websites they frequent. The goal: to deter the next market manipulator or rogue trader.

Goldman Channels FDR's `Nothing to Fear' With Sell Gold Call (Bloomberg)
There’s “nothing to fear but fear itself,” the analysts entitled the seven-page note, channeling comments from Roosevelt’s 1933 inauguration when the U.S. economy was being ravaged by the Great Depression. “It’s time to sell the fear barometer,” the bank said, and recommended shorting gold.

Desperate Whole Foods will offer tattoos to lure hipsters (NYP)
Bougie grocery chain Whole Foods is trying to appeal to hip millennials by selling . . . tattoos? That seems to be the concept behind 365 — the upscale food purveyor’s new spinoff supermarket — which will sell comparatively cheaper items along with some newly announced extras. Whole Foods’ co-CEO Walter Robb tells Bloomberg News that the company is thinking outside the grocery-store box with its program Friends of 365, which will allow suppliers and vendors like body-care-product sellers, record shops and tattoo parlors, to set up in their 365 stores.

Goldman Sachs banker embroiled in massive overseas money scandal (NYP)
The fallout from the widening scandal hitting the white-shoe investment bank involves Tim Leissner, the Singapore-based chairman of Goldman’s Southeast Asia operations, who has left that country and relocated to Los Angeles on a leave of absence from the firm. A state fund — 1Malaysia Development Berhad (1MDB) — was set up with Leissner’s assistance, and Goldman was paid sky-high commissions for bond sales. Then $681 million tied to the fund mysteriously turned up in the bank account of Malaysian Prime Minister Najib Razak. The FBI reportedly is investigating all the fund’s transactions in concert with wider probes of money-laundering allegations spanning five countries.

Octopus mating display canceled over cannibalism fears (UPI)
The aquarium said its annual event, which features two octopuses mating for the enjoyment of the public, was called off Sunday because officials feared the male octopus, Kong, would merely eat any female he encountered. Officials said Kong weighs in at 70 pounds, making experts concerned that he would eat any of the available female octopuses, which weighed only 30 to 40 pounds.

European Banks Buffeted by Bond Investors’ Fears (WSJ)
European banks struggling with falling stock prices are also being buffeted by concerns that bond buyers could take greater-than-anticipated losses if a lender hits financial straits. Investors say the recent rescue of four relatively small banks in Italy and one in Portugal taught them a lesson with wider implications: Central banks are wary of suffering a political and financial backlash if they force losses on a bank’s individual investors, who are often also depositors. And that means larger institutional investors across the Continent, especially in southern Europe, are more vulnerable.

Bank Failure Fallout Should Be Spread Thin and Wide, Lenders Say (Bloomberg)
Global bank regulators should allow “moderate” contagion to spread across the financial system should one of the world’s biggest lenders fail, preventing a fatal blow hitting the unregulated, non-bank part, a European bank lobby organization said. The Basel Committee on Banking Supervision should allow less-connected banks to buy the debt of the world’s globally systemically important banks, even if the securities are designed to take losses in a collapse, the European Banking Federation said. The group commented on the committee’s planned rules for total loss-absorbing capacity, or TLAC.

Hong Kong Looks for Answers as HSBC Decides to Stay in London (WSJ)
HSBC Holdings PLC’s decision to keep its headquarters in the U.K. rather than move to Hong Kong is prompting soul-searching in this former British colony about how it is seen on the world stage. The decision comes as Hong Kong’s growing ties to the volatile mainland markets are sparking concern among investors, who are fearful of outsize interference from Chinese authorities.

Man Skipped Work For 6 Years And No One Noticed (HP)
According to deputy mayor Jorge Blas, it wasn’t until Garcia was due to be recognized for his hard work in 2010 that authorities realized his office was sitting vacant. "I wondered whether he was still working there, had he retired, had he died? But the payroll showed he was still receiving a salary," Blas told Spanish newspaper El Mundo, according to The Local. “I called him up and asked him, ‘What did you do yesterday? The month before, the month before that?’ He didn’t know what to say,” Blas said. Garcia's water company coworkers thought the plant was being overseen by local authorities because they hadn't seen Garcia in so long. Garcia’s attorney, speaking on his behalf, reportedly blamed bullying at his workplace for his absence. He also said there was no work to do.

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By Agnico-Eagle (Agnico-Eagle Mines Limited) [CC0], via Wikimedia Commons

Opening Bell: 9.19.16

Funds dump gold; Fed insider warns of risk of low rates; Twitter sued by investor over (lack of) growth; ‘Cannibal Cop’ says he’s a hot dish on the dating scene; and more.

By Jones7224 (Own work) [CC BY-SA 3.0], via Wikimedia Commons

Opening Bell: 8.1.16

Gundlach says sell everything; Goldman is making Olympics predictions; Lawsuit filed in New York over handling of dachshund's $100,000 trust fund; and more.

Opening Bell: 05.17.12

White House Steps Up Push To Toughen Rules On Banks (WSJ) White House officials have intensified their talks with the Treasury Department in the days since J.P. Morgan's losses came to light, these people say—representing the first tangible political impact from a trading mess that has cost one of the nation's most prominent banks more than $2 billion...White House and Treasury officials are still determining whether the Volcker rule would have prevented the losses at J.P. Morgan, people familiar with the discussions said. Some of the president's political advisers are concerned that the J.P. Morgan trades, even if determined to violate the spirit of the rule, might slip through the regulatory net. From 'Caveman' To 'Whale' (WSJ) Even after Dynegy's holding company filed for bankruptcy protection on Nov. 7, the trade seemed like it still would be a loser for Mr. Iksil and J.P. Morgan. Only about six weeks remained until the trade was set to expire, and another company needed to default for J.P. Morgan to make money and the bullish hedge funds to lose out. Some traders took to calling Mr. Iksil a "caveman" for stubbornly pursing the trade. Mr. Iksil continued to bet against the index, however, and it soon weakened, causing a buzz among unhappy rivals, these traders say. "We called the trade the 'pain trade' and the 'widow maker'; it kept going down for no reason," said a trader at another firm, who called his broker and says he was told it was Mr. Iksil who was doing all the bearish trading. "It felt like Bruno was trying to wipe everyone out." Then on Nov. 29, in something of a shock, AMR Corp., American Airlines' parent company and one of the companies in the index, filed for bankruptcy protection. "People freaked out," recalls a hedge-fund trader. The index weakened significantly, allowing J.P. Morgan to rack up about $450 million in total profits from the trade, according to traders. Rival firms suffered similar-size losses. It capped a successful year for Mr. Iksil and his group, though the profits would be more than offset this year when they shifted to a more bullish tack on corporate credit, losing $2 billion-plus in the process. Goldman to Cash Out $1 Billion of Facebook Holding in IPO (Bloomberg) The investment bank and its funds will sell 28.7 million of the 65.9 million shares they own, more than twice the amount initially planned, Menlo Park, California-based Facebook said yesterday in a filing. The shares are being offered in a range of $34 to $38 apiece, meaning the stock being sold in this week’s IPO is valued between $975 million and $1.09 billion. SEC Probes Roles Of Hedge Fund In CDOs (WSJ) U.S. securities regulators are investigating hedge-fund firm Magnetar Capital LLC, which bet on several mortgage-bond deals that wound up imploding during the financial crisis, according to people familiar with the matter. While Magnetar has faced scrutiny over its role in various collateralized debt obligations, or CDOs, the Illinois firm itself now is a target of an investigation by the Securities and Exchange Commission, these people said. ECB Bars Access to Four Greek Banks (FT) The move raises the pressure on Greece to stick to its international bailout by highlighting the risk that eurozone central bankers could pull the plug on its financial system. It reflected ECB fears that a planned recapitalisation of Greece’s banks could be delayed. Greek Euro Exit Would Risk Asia Crisis-Style Rout, Zeti Says (Bloomberg) A Greek exit from the euro could cause contagion comparable to the Asian financial crisis, according to Malaysia’s central bank Governor Zeti Akhtar Aziz, who had first-hand experience of that turmoil. “The worst-case scenario is what we saw in Asia,” Zeti, 64, said in an interview with Bloomberg Television in Istanbul yesterday. “When one economy collapses, then the market usually moves on to focus on the next one, then there will be a contagion that will affect different countries that probably don’t deserve those kinds of consequences.” Strippers in Paris Go on Strike, Say Wages 'Miserable' (Reuters) The Crazy Horse, one of the most popular establishments of its kind in the world, said it was forced to cancel performances this week for the first time since the cabaret was created in 1951. The night club, which declined to give details on salary demands or current wages, said in a statement that it had always taken the wellbeing of its artists very seriously and that talks were continuing to resolve the dispute. "It's an exceptional place which has the specialty of presenting a fully naked show," Suzanne, one of the dancers, told RTL radio. "What's wrong is that we are asked to work 24 days per month for a pay that is worse than miserable," she said. JPMorgan’s Trading Loss Is Said to Rise at Least 50% (NYT) The trading losses suffered by JPMorgan Chase have surged in recent days, surpassing the bank’s initial $2 billion estimate by at least $1 billion, according to people with knowledge of the losses. When Jamie Dimon, JPMorgan’s chief executive, announced the losses last Thursday, he indicated they could double within the next few quarters. But that process has been compressed into four trading days as hedge funds and other investors take advantage of JPMorgan’s distress, fueling faster deterioration in the underlying credit market positions held by the bank. A spokeswoman for the bank declined to comment, although Mr. Dimon has said the total paper trading losses will be volatile depending on day-to-day market fluctuations. Several on FOMC Said Easing May Be Needed on Faltering (Bloomberg) The Federal Reserve signaled further monetary easing remains an option to protect the U.S. economy from the danger that lawmakers will fail to reach agreement on the budget or Europe’s debt woes worsen. Several members of the Federal Open Market Committee said new actions could be necessary if the economy loses momentum or “downside risks to the forecast became great enough,” according to minutes of the Federal Open Market Committee’s April meeting released yesterday in Washington. Judge Denies Gupta's Wiretap Motion (NYP) Ex-Goldman Sachs director Rajat Gupta lost his bid to get three key wiretaps tossed as evidence in his upcoming insider-trading trial. Manhattan federal judge Jed Rakoff gave tentative approval yesterday for the jury to hear the wiretaps, which are crucial to the government’s case against Gupta. A former head of McKinsey & Co., who also sat on Procter & Gamble’s board, Gupta is accused of feeding tips to ex-hedge funder Raj Rajaratnam, who began an 11-year prison term last October for insider trading. The taped conversations between Rajaratnam and his traders have him talking about tips from a unnamed leaker on Goldman’s board. Man protests restaurant's all-you-can-eat policy (TMJ4) A disturbance at a local restaurant when one man got upset that an all-you-can-eat fish fry didn't live up to its name. At 6'6" and 350 lbs, Bill Wisth admits he's a big guy who can pack it away more than most. And he wants one restaurant to make all-you-can-eat, all he can eat too. "It's false advertising," said Wisth to TODAY'S TMJ4. He was there Friday when the restaurant cut him off after he ate a dozen pieces. "Well, we asked for more fish and they refused to give us any more fish," recalled Wisth. The restaurant says it was running out of fish and patience; arguing Bill has been a problem customer before. They sent him on his way with another eight pieces, but that still wasn't enough. He was so fired up, he called the police. "I think that people have to stand up for consumers," said Wisth. Elizabeth Roeming is a waitress there and says they've tried to work with Bill over the years -- like letting him have a tab he still hasn't paid off. Bill isn't backing down, saying his fish fry fight isn't over. But in the end, even he had something nice to say. "They do have like some of the best pizza in town if you like deep dish pizza," said Wisth. He says he will picket every Sunday until the restaurant rethinks what happened.

Opening Bell: 03.01.12

Fast, Furious At MF Global (WSJ) At 4:53 p.m. five days before MF Global Holdings Ltd. collapsed, an employee in its Chicago office asked a co-worker to move $165 million from one of the securities firm's bank accounts to another. "Approved," came the response one minute later, according to an email reviewed by The Wall Street Journal. Within about 15 minutes, the money moved to an MF Global account at J.P. Morgan Chase & Co., internal documents show. Within minutes, though, several MF Global employees realized there was a problem, according to people familiar with the matter. The cash actually had been transferred out of a customer-segregated account, not one of the company's own bank accounts, the documents show. The employees tried to reverse the $165 million transaction but failed. RBS In Initial Pact To Sell Asian Assets (WSJ) CIMB, based in Kuala Lumpur, said Thursday it had signed a memorandum of understanding to acquire certain parts of RBS's cash-equities, equity-capital-markets, and corporate-finance businesses across the Asia-Pacific region. Blackstone Founder Tops Private Equity Pay League (FT) Schwarzman received $74 million in cash distributions from investment funds started before Blackstone’s 2007 New York listing and $134.5 million in dividends from his 21 percent stake in the company, according to regulatory filings. He was also paid a $350,000 base salary and received $4.6 million from the firm’s share of investor profits, known as carried interest. Former Goldman Partner Peter Kiernan Now a Self-Fashioned Political Pundit (NYT) After retiring from the firm in 2001, the former banker headed a movie star’s charity, got a shamrock tattooed on his rear end after losing a bet with his son, adopted a Vietnamese potbellied pig named Mojo and, most recently, published a political best seller with a title that is not quite printable in a family newspaper. Apple Stock to Hit $1,000? Steve Wozniak Believes So (CNBC) "You know, people talk about $1,000 stock price... you know, at first you want to doubt it but I actually believe that and I don't really follow stock markets," Wozniak said. BofA Weighs New Fees (WSJ) The search for new sources of income is especially pressing at Bank of America, where 2011 revenue dropped by $26.2 billion, or 22%, from its 2009 level. Bank of America pilot programs in Arizona, Georgia and Massachusetts now are experimenting with charging $6 to $9 a month for an "Essentials" account. Other account options being tested in those states carry monthly charges of $9, $12, $15 and $25 but give customers opportunities to avoid the payments by maintaining minimum balances, using a credit card or taking a mortgage with Bank of America, according to a memo distributed to employees. Solar storm alert: Scientist finds 12% chance of breathtaking, possibly crippling, northern lights show (NYDN) In the next 10 years, there’s a 12% chance of a northern lights display that’s so grand, people could potentially watch in awe from the sidewalks of Manhattan to the beaches of the Caribbean. The last time the world saw such a widespread aurora borealis was 1859. This future event could well be the event of a lifetime for another, far-less beautiful reason: The solar flare that would set off the dazzling sky display could also leave countless people in the dark by frying power grids, communication networks and crucial satellites. It could add up to trillions of dollars in damage once the sky show is all over, followed by a rough recovery that could take years, according to a 2008 analysis of such an event’s impact. Bernanke Quells Talk Of Fresh Stimulus (Bloomberg) Bernanke, in testimony to lawmakers yesterday in Washington, described “positive developments” in the job market while saying it’s still “far from normal.” He said the inflationary impact of higher gasoline prices is likely to be temporary. Star Scam Condo A Steal (NYP) Kenneth Starr’s swanky Upper East Side condo sold yesterday for $5.6 million — about $2 million less than he paid using money stolen from actress Uma Thurman and heiress Rachel “Bunny” Mellon. The winning bidder at the Treasury Department auction declined to give his name, but said he was a developer who bought the triplex on East 74th Street as an investment. Starr — a money manager whose A-list clients also included Al Pacino and Lauren Bacall — was caught cowering in a closet after his $33 million Ponzi scheme collapsed in 2010. He’s serving seven-plus years in the slammer and facing a divorce from his ex-stripper wife, Diane Passage. Harvard Business School? You'll Go Through Dee Leopold First (WSJ) People overestimate the role the essays play in the application. They're very, very helpful for the candidate, and they're a really good platform for starting a discussion in an interview, but we don't admit people because of an essay. I don't need to have too much of a dramatic arc. There are some essays where I start reading and all of a sudden I feel like I'm in the middle of a very well-written novel. It can get overdone and overcrafted. Sometimes the challenge in the essays is to be honest and to be clear. It may be helpful for someone to say, "I have no idea what you're talking about." Goldman Sachs ExecutiveIn US Insider Probe (Bloomberg) Goldman Sachs said in a Feb. 28 regulatory filing that “from time to time, the firm and its employees are the subject of or otherwise involved in regulatory investigations relating to insider trading, the potential misuse of material nonpublic information and the effectiveness of the firm’s insider trading controls and information barriers.” Eating At Benihana With Tracy Morgan (Grub Street) "I love Benihana like I love my favorite strip club," Tracy Morgan says. "Sue's Rendezvous and Benihana, that's the joint. "This is my family. These people know me. This is fancy, man. They cook the food right in front of you. They might go to Pathmark and buy it, but they're gonna cook it. Fancy. It's romantic. I go up to the hood, get a chicken head, bring her here and I'll wrap her up. It's fancy." Guy at the next table is loving it. "That's my thing, going up there in the hood and getting them chickens pregnant." Tracy's talking directly to the table next to us now. Everyone, about seven strangers,is on the hook. "I'm old-school. I don't be pulling out. I ain't wearing no rubber, either. If you ain't willing to die for it, you didn't really want to have it."

Opening Bell: 01.29.13

US Wants Criminal Charges For RBS (WSJ) U.S. authorities are pushing for a settlement of interest-rate-rigging allegations with Royal Bank of Scotland that would result in a unit of the big British bank pleading guilty to criminal charges in addition to paying a penalty, according to people briefed on the negotiations. RBS executives are resisting any guilty plea, fearful that it could lead clients to cut off activity with the bank and that it could increase exposure to costly litigation, some of these people said. The negotiations reflect a newly tough stance by U.S. authorities, who until recently have faced criticism for rarely pursuing criminal action against big banks.U.S. authorities are pushing for a settlement of interest-rate-rigging allegations with Royal Bank of Scotland Group RBS.LN +0.52% PLC that would result in a unit of the big British bank pleading guilty to criminal charges in addition to paying a penalty, according to people briefed on the negotiations. RBS executives are resisting any guilty plea, fearful that it could lead clients to cut off activity with the bank and that it could increase exposure to costly litigation, some of these people said. The negotiations reflect a newly tough stance by U.S. authorities, who until recently have faced criticism for rarely pursuing criminal action against big banks. IRS can seek UBS records for taxpayers hiding income at Wegelin (Reuters) A federal judge on Monday authorized the Internal Revenue Service to seek records from UBS AG of U.S. taxpayers suspected of hiding their income in accounts with Swiss bank Wegelin. Wegelin, the oldest Swiss private bank, pleaded guilty in Manhattan federal court on January 3 to charges of helping wealthy Americans evade taxes through secret accounts and then announced it would close down as a result. Little Debbie Maker to Buy Drake’s Brand, Hostess Says (Bloomberg) Hostess Brands Inc. said McKee Foods Corp., maker of Little Debbie snacks, agreed to pay $27.5 million for its Drake’s brand and United States Bakery Inc. offered to buy certain bread brands for $28.9 million. “The contemplated purchase prices for Drake’s and the four bread brands, together with our previous announced stalking- horse bid for the majority of our bread business, means we have agreements to sell these assets for at least $440 million,” Hostess Chief Executive Officer Gregory F. Rayburn said today in a statement. United States Bakery agreed to buy the Sweetheart, Eddy’s, Standish Farms and Grandma Emilie’s bread brands, four bakeries and 14 depots, plus certain equipment, according to court papers. Iceland Wins Case On Deposit Guarantees (WSJ) Iceland won a sweeping victory in a court fight over its responsibilities to foreign depositors in Icelandic bank Landsbanki, which failed in 2008. The court of the European Free Trade Association on Monday said Iceland didn't breach European Economic Area directives on deposit guarantees by not compensating U.K. and Dutch depositors in Landsbanki's online savings accounts, known as Icesave accounts. The EFTA Surveillance Authority, or ESA, which brought the case against Iceland, had claimed that Iceland should have made sure U.K. and Dutch savers who lost money on Icesave got repaid from deposit insurance. Jamie-Lynn Sigler engaged to Lenny Dykstra's son (NYDN) The actress who played Meadow Soprano announced on Twitter Monday that she's engaged to Cutter Dykstra, a baseball player with the Washington Nationals. "So this just happened," she tweeted along with a photo showing off her huge new diamond alongside her smiling fiancé. "Thank you so much for all the love everyone. I am so happy and more importantly lucky," Sigler, 31, said in a follow-up tweet. "She said yes!!" Cutter, 23, wrote on his own Twitter feed. Sigler was by Cutter's side last month when family members filed into a federal courthouse in downtown Los Angeles for Lenny Dykstra's sentencing in his bankruptcy fraud case. Yahoo Profit Drops But Revenue Rises (WSJ) For Ms. Mayer, the results were enough that the "honeymoon period is going to last at least a couple of more quarters" while investors wait to see progress, said Sameet Sinha, an analyst at B. Riley & Co. Mayor Bloomberg Has Opinions (NYDN) In a New York Magazine profile about Christine Quinn, the City Council Speaker and candidate for mayor, the author recalled being introduced to Bloomberg at what he described as “a Christmas party for the rich” on the Upper East Side. “My friend and I followed the host over, shook Bloomberg’s hand, and my friend thanked him for his position on gun control,” the author writes. “Without even acknowledging the comment, Bloomberg gestured toward a woman in a very tight floor-length gown standing nearby and said, ‘Look at the ass on her.’” According to the article, Bloomberg also has strong opinions about Quinn’s appearance – turning up his nose when she wears flats or waits too long before coloring her hair. “The mayor has no use for flat shoes,” Quinn told the reporter. “I was at a parade with him once and he said, ‘What are those?’ and I said, ‘They’re comfortable,’ and he said, ‘I never want to hear those words out of your mouth again,’” she recalled. “He likes me in high heels.” “Another big thing with the mayor, when I am rooting … like, the couple of days a week before I need to get my hair colored, he’ll say, ‘Do you pay a lot to make your hair be two colors? Because now it’s three with the gray,’” Quinn continued. TARP Firms' Pay Unchecked (WSJ) Christy Romero, the Special Inspector General for the Troubled Asset Relief Program, on Monday said the Treasury failed to look out for taxpayers by relying "to a great extent on the companies' proposals and justifications without conducting its own independent analysis." Ms. Romero also said the Treasury hasn't put in place policies that would ensure salaries are within guidelines designed to discourage excessive risk taking by companies receiving bailout aid. Bridgewater’s Dalio Sees ‘Game Changer’ as Money Shifts (Bloomberg) Ray Dalio, founder of Bridgewater Associates LP, the world’s biggest hedge fund, said 2013 will be a “game changer” for the economy as investors reallocate money after risks such as Europe’s sovereign debt crisis receded. “There’s a lot of money in a place that’s getting a very bad return and in this particular year there’s going to be, in my opinion, a shift,” Dalio said at a Bloomberg panel discussion at the World Economic Forum in Davos, Switzerland. “The complexion of the world will change as that money goes from cash into other things. The landscape will change, particularly later in the year and beyond.” Will the New BlackBerry Win Back Corporate Customers? (WSJ) Survey says: probably not but maybe, who knows. Credit Suisse Said to Seek to Sublet at Hong Kong Skyscraper (Bloomberg) If you know anyone who's interested: Credit Suisse is seeking to sublet as much as 64,000 square feet of office space in Hong Kong’s tallest skyscraper, as prime office vacancies rise in the city amid job cuts by global financial services companies. The Zurich-based bank is looking for tenants to take up two floors, or about a fifth of the space it currently occupies at the International Commerce Centre in West Kowloon, according to two people with knowledge of the matter, who declined to be identified because the information isn’t public. Woman accused of putting poison in her privates in bid to kill husband (Mirror) A woman is being sued by her husband for allegedly trying to kill him by putting poison in her genitals and then asking him to perform oral sex. The Brazilian wife is accused of planting a toxic substance on her genitals before luring her husband to bed. Reports in the South American country suggest he was ready and willing, and only escaped death because he noticed a strange smell. The curious husband then took his wife to hospital in Sao Jose do Rito Preto to find out the cause of the unusual odour. The alleged attempt on his life was exposed when tests on his wife discovered traces of a poisonous substance down below.

Opening Bell: 10.18.12

Morgan Stanley Posts Loss (WSJ) "The rebound in fixed income and commodities sales and trading indicates that clients have re-engaged after the uncertainty of the rating review in the previous quarter," Chief Executive James Gorman said, referring to Moody's Investors Service's move over the summer to downgrade the credit rating on more than a dozen banks. "We are beginning to unlock the full potential of the Global Wealth Management franchise, having increased our ownership of, and agreed on a purchase price for the rest of, Morgan Stanley Wealth Management." For the quarter, Morgan Stanley reported a loss of $1.02 billion, compared with a year-earlier profit of $2.2 billion. The per-share loss, which reflects the payment of preferred dividends, was 55 cents compared with a profit of $1.15 a year earlier. Stripping out the impact of debt-valuation changes, the per-share profit was 28 cents versus two cents a share a year ago. Revenue fell 46% to $5.29 billion, including a negative impact of $2.3 billion from the tightening of credit spreads related to debt. Stripping out debt-valuation changes revenue was up 18% to $7.55 billion. Analysts polled by Thomson Reuters expected earnings of 24 cents, excluding gains related to debt, on revenue of $6.36 billion. Morgan Stanley Reduces Investment-Bank Pay to $5.2 Billion (Bloomberg) The ratio of compensation to revenue in the unit fell to 44.9 percent, compared with 48.4 percent in the same period a year earlier, when excluding accounting gains and losses related to the firm’s credit spreads. That’s still higher than Goldman Sachs and JPMorgan’s investment bank. Compensation and benefits for all of Morgan Stanley totaled $12 billion in the first nine months, down 4 percent. Goldman Ex-Employee Says Firm Pushed Europe Bank Options (Bloomberg) Goldman Sachs sought to profit last year by persuading clients to buy and sell stock options on European banks such as BNP Paribas SA and UniCredit SpA, according to former employee Greg Smith’s new book. “We must have changed our view on each of these institutions from positive to negative back to positive ten times,” Smith writes in “Why I Left Goldman Sachs: A Wall Street Story,” scheduled for release on Oct. 22. “I remember thinking, ‘How can we be doing this with a straight face? No thinking client could believe that conditions on the ground could change that frequently.”’ [...] Smith also describes being disappointed with his $500,000 bonus at the end of 2006. “By any measure, I should have felt exceptionally lucky and grateful,” he writes. “But by the warped logic of Goldman Sachs and Wall Street, I was being screwed.” U.S. to Get Downgraded Amid Fiscal ‘Theater,’ Pimco Says (Bloomberg) “The U.S. will get downgraded, it’s a question of when,” Scott Mather, Pimco’s head of global portfolio management, said today in Wellington. “It depends on what the end of the year looks like, but it could be fairly soon after that.” Asian Scion's Trades Draw Scrutiny (WSJ) A federal probe into an alleged multimillion-dollar insider trading scheme is focusing on the son of a deposed Central Asian autocrat once courted by the U.S. as a key ally in the war on terror, according to people involved in the investigation. The globe-spanning criminal case marks a turnabout by the U.S. against a ruling family it once relied on to keep open military supply lines to Afghanistan. For years, the U.S. maintained good relations with then-Kyrgyzstan President Kurmanbek Bakiyev. Now, the U.S. has prepared charges against the former strongman's son, Maksim Bakiyev, who officials say spent some of his exile in London profiting from illegal tips on stocks trading on the New York Stock Exchange and Nasdaq. On Friday, the younger Mr. Bakiyev, 35, was arrested in England on an extradition request from the U.S. Mr. Bakiyev's U.K. attorney, Michael O'Kane, declined to comment. Computer programmer 'quadruples productivity' after hiring a woman to slap him in the face every time she catches him looking at Facebook (DM) Maneesh Sethi placed an advert on Craigslist to recruit someone willing to monitor what he was looking at on his laptop. The computer expert and writer, from San Francisco, now pays a female employee £5 ($8) an hour to strike him in the face if she spots him wasting time on social media. Mr Seethi claims the unusual motivational system has helped him boost his productivity from just 35 percent to around 98 percent during the working day...Mr Seethi published details on his blog of his Craigslist advert, which was entitled '(Domestic gigs) Slap me if I get off task'. In it he wrote: 'I'm looking for someone who can work next to me at a defined location (my house or a cafe) and will make sure to watch what is happening on my screen. 'When I am wasting time, you'll have to yell at me or if need be, slap me. 'You can do your own work at the same time. Looking for help asap. Mr Seethi said he was inundated with offers from potential slappers and quickly hired a volunteer he names only as Kara. He wrote: 'Within minutes, my inbox began blowing up. Up to 50% of Greek Workforce Strikes; Tipping Point Nears (CNBC) As European Union leaders prepare to meet in Brussels on Thursday, Greece’s workers aim to make their voices heard by holding a 24-hour strike bringing the country to a halt. With the economy in the fifth year of a recession, the lost production could prove counterproductive and cost the economy 100 million euros ($131 million), according to one expert. Most business and public sector activity is expected to grind to a halt during the strike called by the ADEDY and GSEE unions that represent around 2 million people — half of Greece’s workforce. A protracted news blackout is also expected as television and radio broadcasters and newspapers shut for the day, according to Reuters. Spain Banks Face More Pain as Worst-Case Scenario Turns Real (Bloomberg) Spain’s request for 100 billion euros of European Union financial aid to shore up its banks is increasing concern about the nation’s growing liabilities. Standard & Poor’s downgraded the country’s debt rating by two levels to BBB-, one step above junk, from BBB+ on Oct. 10, saying it wasn’t clear who will bear the cost of recapitalizing banks. It cut the ratings of 11 lenders including Banco Santander SA and Banco Bilbao Vizcaya Argentaria SA, Spain’s largest, two days ago, citing the sovereign downgrade. Brothels Rescue Cash-Strapped Greek Soccer Team (AP) Players on a cash-strapped Greek soccer team now wear pink practice jerseys with the logos "Villa Erotica" and "Soula's House of History," two bordellos it recruited as sponsors after drastic government spending cuts left the country's sports clubs facing ruin. Other teams have also turned to unconventional financing. One has a deal with a local funeral home and others have wooed kebab shops, a jam factory and producers of Greece's trademark feta cheese. But the amateur Voukefalas club — whose players include pizza delivery guys, students, waiters and a bartender — has raised eyebrows with its flamboyant sponsorship choice. Prostitution is legal in Greece, where brothels operate under strict guidelines. Though garish neon signs advertising their services are tolerated, the soccer sponsorship has ruffled some feathers in the sports-mad city of Larissa. League organizers have banned the pink jerseys during games, saying the deal violates "the sporting ideal" and is inappropriate for underage fans...Brothel owner Soula Alevridou, the team's new benefactor, has already paid more than 1,000 euros ($1,312) for players to wear her jerseys. The team is appealing the game ban, but that doesn't worry the 67-year-old Alevridou, who says she's only in it because she loves soccer. "It's not the kind of business that needs promotion," she said, dressed all in white and flanked by two young women in dark leggings at a recent game. "It's a word-of-mouth kind of thing."

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: 03.30.12

Three Major Banks Prepare for Possible Credit Downgrades (NYT) Moody’s Investors Service has said it will decide in mid-May whether to lower its ratings for 17 global financial companies. Morgan Stanley, which was hit hard in the financial crisis, appears to be the most vulnerable. Moody’s is threatening to cut the bank’s ratings by three notches, to a level that would be well below the rating of a rival like JPMorgan Chase. Eurozone Lifts Firewall (WSJ) Euro-zone finance ministers on Friday agreed on a temporary boost of the bloc's bailout lending limit to €700 billion ($931 billion), opting for a less ambitious plan that some fear won't be enough to prevent a re-awakening of euro zone financial turmoil. Dalio Earns $3.9bn to Top Hedge Fund Pay List (FT) Ray Dalio, head of Bridgewater, the world’s largest hedge fund, personally made $3.9 billion in a year that his $70 billion Pure Alpha fund produced $13.8 billion of investment profits for its investors, according to industry rankings. He tops a list published Friday by Absolute Return magazine of the richest 25 hedge fund managers. The select group took home $14.4 billion in pay and paper profits on their own investments last year, down from $22 billion in 2010 in a sign of the industry’s struggle to deliver returns for its clients in 2011. Goldman Bets on Property Rebound With New Fund: Mortgages (Bloomberg) The U.S. Housing Recovery Fund is expected to finish its first round of capital raising and open April 1, according to a marketing document obtained by Bloomberg News. It will focus on senior-ranked securities without government backing, many of which now carry junk credit grades. BATS Weighs Cooling Its Listing Push (WSJ) BATS Global Markets Inc. is considering suspending its efforts to recruit corporate listings after a software glitch last Friday derailed the exchange operator's IPO, people familiar with the matter said. Concerns about BATS's bungled initial public offering could disrupt its efforts to draw other companies to list their stocks on its electronic exchange, forestalling ambitions by the electronic-markets operator to become a full-service exchange company. Such a move could entail notifying the Securities and Exchange Commission, which last year approved BATS's plan to list shares and exchange-traded products. Canada Eliminates Penny Costing Penny-and-a-Half to Make (Bloomberg) Canada will withdraw the penny from circulation this year, saving taxpayers about C$11 million ($11 million) annually and forcing retailers to round prices to the nearest nickel, the government announced in its budget today. Grand Central nabs tell-all by ex-Goldman exec Smith (NYP) Greg Smith, the former Goldman Sachs executive who became an instant sensation when he ripped the Wall Street investment bank with a resignation letter published as an Op-Ed piece in the New York Times, has scored a $1.5 million advance to write a memoir of his experiences. Oil Rally Fails to Lift Commodity Hedge Funds' Returns (FT) Many multibillion managers have been wary of potential political shocks in the Middle East and a repeat of last year’s May oil sell-off. They have shunned risk over the past three months or lost out by betting that oil markets would become more choppy. Many of the sector’s leading names have underperformed broader hedge fund peers, which have enjoyed one of their best quarters on the back of rising global equity markets. Billions Lost In Tax Refund Scam (WSJ) The perpetrators of the scheme, authorities say, swipe the Social Security numbers of Puerto Rican citizens, who don't have to pay federal income tax—and are less likely to be on the IRS radar—and use their information to file fake returns. In some cases, they enlist U.S. mail carriers to intercept the refund checks that are disbursed. The plot, which includes participants from around the U.S. and Latin America, has been around for at least five years. Prosecutors have obtained multiple convictions but none involving those believed to be among the top players in the operation, according to several people briefed on investigations into the fraud. BlackBerry Maker In Turmoil (WSJ) The overhaul comes just two months after Thorsten Heins took the reins at RIM and confidently proclaimed there was no need for "seismic" change. But with the company's sales tumbling 25% in the latest quarter, new BlackBerrys piling up unsold and a crucial lineup of new devices still not expected to arrive until later this year, Mr. Heins is taking more drastic actions. RIM will back out of its high-profile attempt to win business among consumers to focus on its core corporate customers. Queen Creek couple accused in dog-sex plan plead not guilty (AZC) A Queen Creek couple have pleaded not guilty to charges of planning to have sex with a dog. The case prompted Sheriff Joe Arpaio to ask the website Craigslist to better monitor its personal ads. Shane Walker, 33, and his wife Sarah Walker, 39, posted a Craigslist ad on Feb. 7 titled, "Wife looking for K9," according to Maricopa County Superior Court records.