Opening Bell: 3.1.16

Barclays loses; Valeant under investigation; Mystery Malaysian high roller at center of global money-laundering probe; Canadian banned from owning turtles after smuggling 38 in pants; and more.
Author:
Publish date:

Barclays Posts Full-Year Loss; Set to Slash Dividend Payouts (WSJ)
Overall results for the year were muted. The bank posted a wider net loss of £394 million ($548.3 million) for the year, compared with a loss of £174 million the year before, hit by litigation costs. Total income, excluding insurance claims, rose 1% to £25.5 billion. The bank’s retail and credit card business continued to perform strongly, but that was offset by the cost of shrinking the bank. Litigation costs also took their toll. The bank said it put aside £1.45 billion in provisions in the fourth quarter to compensate customers who were sold payment protection insurance they didn’t need.

Valeant Under Investigation by SEC (WSJ)
The SEC has requested information about Valeant’s now-terminated relationship with drug distributor Philidor Rx Services LLC, and Valeant has submitted emails, financial documents and other data to comply with the request, according to a person familiar with the matter. In addition, said people familiar with the matter, a finance executive, Tanya Carro, left in the wake of an internal review that found Valeant had booked some revenues from Philidor too early in 2014, an error it disclosed last week. One person said she was on paid administrative leave.

Fed's Dudley 'Somewhat Less Confident' on Inflation Outlook (Bloomberg)
“On balance, I am somewhat less confident than I was before,” Dudley said in remarks prepared for a speech Tuesday in the Chinese city of Hangzhou. “Partly, this reflects my assessment that uncertainty to the outlook has increased and that downside risks have crept up.”

Mystery Malaysian high roller at center of global money-laundering probe (NYP)
He arrived from out of nowhere in 2009, a mysterious, geeky 28-year-old dropping ridiculous amounts of money all over the city. When Lindsay Lohan was celebrating her 23rd birthday at 1Oak, he sent 23 bottles of Cristal to her table. He spent $160,000 on bottle service one evening at Chelsea hot spot Avenue and once flew eight waitresses from Greenwich Village club Pink Elephant to an afterparty — in Malaysia. Yet no one knew who this man, Low Taek Jho — otherwise known as Jho Low — was, or where he got his money...Now the mystery of Jho Low may have finally been solved, thanks to a scandal that threatens the government of Malaysia and Wall Street titan Goldman Sachs.

Canadian banned from owning turtles after smuggling 38 in pants (Reuters)
Dong Yan of Windsor, Ontario, had tried to bring the reptiles from the United States into the southern part of the province. “The turtles were contained in plastic bags and taped to Mr. Yan's legs,” Environment and Climate Change Canada said in a statement on Thursday. Yan was convicted on February 17 after he was caught during an inspection in 2014 when he tried to enter Canada through the Niagara border crossing, the department said. Yan’s probation is for two years, and his fine was C$3,500 ($2,600). He was also sentenced to 50 hours of community service and must notify the environment department of international travel. Yan was also ordered to write a letter about his experience “for publication as the department sees fit.”

Glencore Posts Biggest Profit Drop Since IPO on Metals Slump (Bloomberg)
By a lot of measures, 2015 was the worst year for Glencore Plc since the mining and trading giant became a public company. Net income excluding some items plunged 69 percent to $1.34 billion during the year as prices for metals and oil collapsed, the Baar, Switzerland-based company said in a statement Tuesday. While that beat the $1.17-billion estimate from analysts, the firm suffered an adjusted loss in its mining division and plans to sell as much as $5 billion in assets.

The Rise and Fall of Commodities Hedge Fund King Willem Kooyker (Bloomberg)
The numbers tell the story. At its height in 2011, Blenheim was the world’s largest commodities-focused hedge fund, with $9.1 billion in assets, people familiar with the firm say. Today, its assets have fallen nearly 85 percent to $1.5 billion. What went wrong? The short answer is that Kooyker didn’t think things would get this bad. He and his colleagues underestimated the economic troubles in China and never thought commodities prices would fall so far, so fast, the people said, speaking on the condition they not be named to avoid jeopardizing business relationships.

ICE Confirms It May Bid for LSE Group, Sending Shares to Record (Bloomberg)
Intercontinental Exchange Inc. said it is considering making an offer for London Stock Exchange Group Plc, a week after Deutsche Boerse AG said it was in merger talks with the U.K. company.

District apologizes for high school students' mock slave auction (UPI)
The Barrington School District apologized after Barrington High School students attending the Illinois Junior Classical League Convention at the Westin hotel in Itasca held a mock slave auction featuring a student in chains being sold. The mock auction was part of a competition to display knowledge of ancient Greek and Roman cultures. The demonstration elicited numerous complaints from parents and students in the audience. Witnesses, many of whom described the display as racially insensitive, said children as young as 13 were in attendance at the time. The Barrington School District's Facebook post reads: "The Barrington School District offers sincere apologies to those offended by a skit our high school Latin students conducted at the Illinois Junior Classical Convention in Itasca this weekend. Their depiction of slavery as it was practiced by ancient Greeks and Romans unintentionally but understandably evoked strong emotions among a diverse audience. We agree with the concern and are reviewing the incident with students and staff who were involved."

Related

Opening Bell: 11.4.15

Spoofing trader found guilty; Goldman probed; Ackman loses big on Valeant; Icahn plays coy on Valeant; "You Can Finally Get Bernie Sanders-Themed Undies"; and more.

Opening Bell: 06.28.12

Interest Rate Probe Escalates (WSJ) Investigators in the U.S., Europe and Asia have been probing alleged wrongdoing in the interest-rate-setting process for about two years. The Barclays settlement marks their biggest win yet. A series of Wall Street Journal articles in 2008 raised questions about whether global banks were manipulating the process by low-balling a key interest rate to avoid looking desperate for cash amid the financial crisis. Emails and instant messages disclosed in the bank's settlement show how Barclays's traders tried to manipulate rates to benefit their own trading positions. "This is the way you pull off deals like this chicken," one trader told another trader in March 2007, according to the U.K. regulator. "Don't tell ANYBODY." Other banks that have disclosed they are under investigation include Citigroup, JPMorgan, Lloyds Banking Group, and RBS. None of these banks have been charged with any wrongdoing in the matter by U.S. or U.K. regulators. Calls for Diamond’s Exit After Barclays ‘Moral Failure’ (CNBC) Lord Oakeshott, a high-profile Liberal Democrat politician, said: "If Bob Diamond had a scintilla of shame he would resign. If Barclays' board had an inch of backbone between them they would sack him." Barclays admitted Wednesday that the actions "fell well short of standards.” Madoff's Brother To Plead Guilty (WSJ) Peter Madoff, 66 years old, is expected to plead guilty to two charges at a hearing Friday in Manhattan federal court, including falsifying the records of an investment adviser and a broad conspiracy count to commit securities fraud and other crimes, according to a letter sent to U.S. District Judge Laura Taylor Swain and filed in court on Wednesday. However, Peter Madoff, the firm's chief compliance officer, isn't expected to admit to knowing about the fraud itself. Instead, he is expected to admit to conduct that enabled the fraud to continue, even if he didn't know new investor money was being used to pay older investors or that no trading was being conducted at the investment firm. JPMorgan Trading Loss May Reach $9 Billion (WSJ) The bank’s exit from its money-losing trade is happening faster than many expected. JPMorgan previously said it hoped to clear its position by early next year; now it is already out of more than half of the trade and may be completely free this year. As JPMorgan has moved rapidly to unwind the position — its most volatile assets in particular — internal models at the bank have recently projected losses of as much as $9 billion. In April, the bank generated an internal report that showed that the losses, assuming worst-case conditions, could reach $8 billion to $9 billion, according to a person who reviewed the report. With much of the most volatile slice of the position sold, however, regulators are unsure how deep the reported losses will eventually be. Some expect that the red ink will not exceed $6 billion to $7 billion. Kerviel ‘Love’ May Not Be Enough To Overturn SocGen Verdict (Bloomberg) Jerome Kerviel’s statement last week that he “loved” Societe Generale may have come too late to help him win a reduced sentence for causing the bank’s 4.9 billion-euro ($6.1 billion) trading loss. Kerviel lawyer David Koubbi may use his client’s remarks during closing arguments in Paris today to offset his own frequent clashes with Judge Mireille Filippini, who threatened to notify the bar about his treatment of witnesses. With Time Running Out California Gorging Itself On Foie Gras (WSJ) California will ban foie gras sales starting Sunday. Meanwhile, goose-liver lovers still have time to enjoy foie gras jelly doughnuts at Umamicatessen in Los Angeles. Chefs there and around the state are counting down their foie gras days by putting it anywhere they can. Some plan foie gras finale feasts on Saturday night. Others offer foie gras in cotton candy, cheesecake, waffles and toffee. "It's a very difficult thing to say goodbye to," says Michael Cimarusti, co-owner and chef at Providence, a celebrated Los Angeles restaurant. He plans to leave a gap on his menu in memory of the dearly departed, with the notation: "formerly a foie gras dish."...At Craftsman & Wolves, a San Francisco bakery, Chef William Werner covers a chunk of foie-gras torchon with a chocolate cremeux that he inserts into chocolate cake batter to create his Devil Inside cake. Some chefs accept the inevitable. Celebrity chef Thomas Keller at Bouchon in Los Angeles recently replaced his foie gras dog biscuits with ones made from chicken livers. Others are looking for ways to duck the ban. Daniel Scherotter, who owns Palio D'Asti in San Francisco, is checking with his lawyer to see whether he can legally give away—rather than sell—a serving of foie gras with a $20 salad. Mr. Scherotter and others expect some restaurants to turn into "duckeasies," where diners can order foie gras using certain code words. They take inspiration from chefs such as Didier Durand, who says that, during a Chicago foie gras ban from 2006 to 2008, he served it at his Cyrano's Bistrot by listing it as potatoes. "People understood that roasted potatoes wouldn't cost $21," he says, but that's what he charged. After two years the ban was rescinded. Merkel Stands Ground Ahead Of Euro Summit (Reuters) EU leaders arrived for a Brussels summit on Thursday more openly divided than at any time since the euro crisis began, with Germany's Chancellor Angela Merkel showing no sign of relenting in her refusal to back other countries' debts. Merkel is being urged at home to hang tough and reject all efforts to make Germany underwrite European partners' borrowing or banks, while her European Union partners say that may be the only way to save the single currency. "Nein! No! Non!" shouted a headline splashed across the front page of the normally sober German business daily Handelsblatt, with a commentary by its editor-in-chief saying Merkel must remain firm at the two-day summit. Lenny Dykstra Takes Plea Deal On Fraud Charges (LAT) Former New York Mets star and self-styled financial guru Lenny Dykstra, already sentenced to three years in state prison for a car scam, has agreed to a plea deal on federal bankruptcy fraud charges after allegedly looting his mansion of valuables as he struggled to battle numerous creditors...According to federal prosecutors, Dykstra sold sports memorabilia and items from his Ventura County mansion, including a $50,000 sink, that were frozen as part of the bankruptcy case. Typically, a person in bankruptcy can't touch assets that are part of the case so that they are available to repay creditors. Dykstra allegedly had dozens of items, including chandeliers, mirrors, artwork, a stove and a grandfather clock delivered to a consignment store, Uniques, on South Barrington Avenue in West Los Angeles. The owner of the store paid him cash for a U-Haul truckload of goods, according to the agent. Manhattan philanthropist behind alleged madam's $250K bond post (NYP) Bonnie Lunt is the mystery hero who put up $250,000 collateral to spring the accused hockey mom madam from Rikers last night, court records show. The 65-year-old Lunt -- a top New York headhunter who has been dubbed the “Jerry Maguire of the communications industry”-- posted her own Upper East Side home to help Gristina make bail, according to bail documents. Lunt’s East 76th street pad is just around the corner from the tiny East 78th Street apartment prosecutors claim Gristina used as headquarters for an alleged multi-million dollar prostitution operation. Miami attacker who chewed man's face was not high on 'bath salts,' officials say (DJ) The Miami "cannibal" who chewed off half of another man's face last month had no drugs in his system other than marijuana, officials said Wednesday, defying suspicions that he was high on "bath salts" during the grisly attack. Rudy Eugene, 31, was shot and killed by police on May 26 after he was found naked and biting into a homeless man's face and eyes beside Miami's MacArthur Causeway. Authorities had suspected Eugene was under the influence of synthetic drugs sold as "bath salts," which have been known to make some users aggressive and behave bizarrely. Witnesses said he had taken off his clothes and was swinging on a light pole before the attack.

Opening Bell: 1.26.16

Ackman regrets not cutting Valeant, Canadian Pacific; Deutsche Bank, RBS earnings will be bleak; AIG tells Icahn to mind his own biz; 112-year-old woman smokes 30 cigarettes a day; and more.

Opening Bell: 3.21.16

Goldman probed in alleged Treasury rig; Valeant CEO will step down; Florida woman fights to keep potty-trained pet alligator; and more.

Opening Bell: 11.2.15

Berkshire No. 2 Charlie Munger bashes Valeant (again); Fed rate rise odds at 50%; Hedge funds suck wind; "Rap video recorded inside Georgia jail prompts investigation"; and more.

Opening Bell: 10.26.15

Analysts and traders think Fed will stay put; Deutsche Moscow probed; Valeant scrutinized; ‘Tinder for threesomes’ gets $500K investment; and more.