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Opening Bell: 4.28.16

Deutsche beats expectations; U.S. economy expands to to 0.5% pace; Life-Sized Noah’s Ark Replica To Hit The High Seas This Summer; and more.

U.S. Economy Expands to 0.5% Pace, Weakest in Two Years (Bloomberg)
Gross domestic product rose at a 0.5 percent annualized rate after a 1.4 percent fourth-quarter advance, Commerce Department data showed Thursday. The increase was less than the 0.7 percent median projection in a Bloomberg survey and marked the third straight disappointing start to a year.

Deutsche Bank Profit Sinks but Beats Expectations (WSJ)
Deutsche Bank AG on Thursday said first-quarter net income beat analysts’ expectations despite being pressured by difficult market conditions and the impact of the bank’s decision to exit certain areas. Net income declined 58% to €236 million ($267 million) compared with the same period last year. The German lender said first-quarter net revenue was €8.1 billion, a 22% decline from a year earlier.

Deutsche Bank Capital Pressure May Ease as CFO Weighs Cuts (Bloomberg)
“We have at least one more year to get the relevant ratios compared to what we had expected in October,” Schenck said on a call with analysts on Thursday, when Deutsche Bank reported a surprise profit for the first quarter. “We are of course looking into potentially accelerating some of the cost measures that we have planned as a reaction to what we’re now seeing in the market. If volumes, if market activity stay at a low level, we will react to that.”

Warren Buffett's shareholder gala enters home stretch (Reuters)
Warren Buffett, who pitched newspapers as a teenage delivery boy, may be entering the final stretch of his "Woodstock for Capitalists," after cutting back his involvement in the event and opening it up for an online audience. This weekend's gathering of Berkshire Hathaway Inc shareholders in Omaha, Nebraska for the company's annual meeting likely won't be the last. But its evolution mirrors the evolution in Buffett's own leadership, focused more on the roughly 90 energy, insurance, manufacturing, railroad, retail and other companies in his empire, even as he delegates more to people who work under him.

Life-Sized Noah’s Ark Replica To Hit The High Seas This Summer (HP)
The Dutch ship’s creator has announced plans to move the massive vessel, with the help of a barge, from its port in the Netherlands to Brazil this summer as part of a multi-country tour. Carpenter Johan Huibers, who completed the biblical boat in 2012 as a religious attraction, said he hopes its 6,000-mile journey to South, Central and North America will help spread the message of the Bible...According to the foundation’s page, Huibers decided to build the mega ship after dreaming that his homeland was flooded by a storm, like one that led to the creation of Noah’s ark as told in the Book of Genesis. Taking a chapter straight out of the Old Testament, Huibers said he crafted his modern-day ark using the same measurements used by Noah. It’s described as being larger than a football field, stretching 410 feet long, 95 feet wide and 75 feet tall. It weighs 2,500 tons and is said to hold more than 5,000 people at one time. But hold your horses as there doesn’t appear to be any plan to stock the ark with animals, two-by-two.

Comcast to Buy DreamWorks Animation for $3.8 Billion (WSJ)
Comcast Corp. on Thursday said it agreed to buy DreamWorks Animation SKG Inc. for about $3.8 billion, a deal that could make the cable giant a rival to Walt Disney Co. in the lucrative family-entertainment business.

Verizon just got one step closer to buying Yahoo (NYP)
Activist investor Jeffrey Smith scored a win in his battle against Yahoo on Wednesday, gaining seats on an expanded board for himself and three allies. In return, the founder of Starboard Value will back off of his proxy battle to unseat the internet portal’s entire board. Smith has been pressing to persuade Chief Executive Marissa Mayer and the rest of the Yahoo board — who he believes have fiddled while the company’s assets have burned — to sell the company’s core assets. Yahoo recently initiated an auction sale and received interest from as many as 10 bidders. The addition of Smith and his allies to the Yahoo board appears to smooth the path for a sale to Verizon — one of the companies, sources said, placing a first-round bid.

Lloyds Banking Group Profit Down 44% After Bond Redemption (Dealbook)
The British lender Lloyds Banking Group said on Thursday that its first-quarter profit declined 44 percent from a year earlier, as the redemption of bonds it issued during the financial crisis and other charges cut into its results. The bank, which is 9 percent owned by the British government after a bailout during the financial crisis, said it had recorded a charge of 790 million pounds, or about $1.2 billion, related to the buyback of so-called enhanced capital notes.

Moscow schoolgirl fools airport security, flies to St. Petersburg ticketless (UPI)
An 11-year-old schoolgirl has confounded Russian police and airport officials after managing to fly unnoticed from Moscow to St. Petersburg without documents and tickets. On the evening of April 25, the girl, a Moscow resident, did not return home from school and her parents began to worry. She was later discovered at St. Petersburg's Pulkovo Airport, having boarded a plane at Moscow's Vnukovo Airport, somehow eluding all inspections. According to the girl, who had never flown on an airplane before, her motive was that she had really wanted to see St. Petersburg. Having arrived at Vnukovo, she joined a family couple with children. Evidently, the security guards accidentally let the girl pass with the other children.

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Opening Bell: 05.29.12

Greece Pours $22.6 Billion Into Four Biggest Banks (Reuters) The long-awaited injection—via bonds from the European Financial Stability Facility rescue fund—will boost the nearly depleted capital base of National Bank, Alpha, Eurobank and Piraeus Bank. "The funds have been disbursed," an official at the Hellenic Financial Stability Facility, who declined to be named, told Reuters. The HFSF was set up to funnel funds from Greece's bailout programme to recapitalise its tottering banks. The HFSF allocated 6.9 billion euros to National Bank, 1.9 billion to Alpha, 4.2 billion to Eurobank and 5 billion to Piraeus. All four are scheduled to report first-quarter earnings this week. The news came as two government officials told Reuters that near-bankrupt Greece could access 3 billion euros, left from its first bailout programme, to cover basic state payments if efforts to revive falling tax revenue fail. U.S. Ready for Europe Fallout, Says Fed Official (WSJ) "There's absolutely no reason for people in the United States to get all in a dither," Federal Reserve Bank of Philadelphia President Charles Plosser said in an interview with The Wall Street Journal. Mr. Plosser said that in the short run, uncertainty in Europe might even work in the U.S. economy's favor, via lower U.S. interest rates and energy prices. Greece to Leave Euro Zone on June 18, Says Guy (CNBC) Greece will leave the euro zone on June 18 if the populist government wins the country’s elections on the 17 as the rest of the euro zone rounds on "cheaters," Nick Dewhirst, director at wealth management firm Integral Asset Management, told CNBC Monday. “The euro zone is a club but you get cheaters who get away with it until everyone finds out and at that point you need to remove them otherwise everyone will cheat. It’s better for Greece to leave,” Dewhirst said. He added that Greek society was built on cheating and scheming, saying “everyone does it” but that voters elsewhere in the euro zone were now calling Greece to account. “The basic question is that a German has to increase working from 65 to 67 and that is to pay for Greeks retiring at 50. The 17th of June is the perfect opportunity to say either 'we’ll behave' or 'we’ll carry on cheating,'" he said. Facebook Debacle Turns High Hopes Into Potentially Mood-Souring Skepticism (WSJ) It is impossible to measure the impact of Facebook's flubbed deal on overall investor confidence. But there is at least one sign of possible fallout: More than $3 billion was yanked from U.S. stock mutual funds by small investors in the week ended Wednesday, according to EPFR Global Inc. in Cambridge, Mass. That was the worst week for withdrawals since March. In the previous week, investors added $311 million to U.S. stock mutual funds. David Guthrie, a 30-year-old actor in Toronto, bought 15 shares of Facebook on its opening day. Before then, he had bought just one stock, yet saw the market as a place to make his savings rise in the long run. Now he feels burned. "If Facebook had made a lot of money, I'd try it again," Mr. Guthrie says. After the stock's disappointing slide, "I would never put big money into the stock market." Zoos' Bitter Choice: To Save Some Species, Letting Others Die (NYT) ...Ozzie, a lion-tailed macaque, will never father children. Lion-tails once flourished in the tops of rain forests in India, using their naturally dark coloring to disappear into the height of the jungle. Though there are only about 4,000 remaining in the wild, not one among Ozzie’s group here in St. Louis will be bred. American zoos are on the verge of giving up on trying to save them. As the number of species at risk of extinction soars, zoos are increasingly being called upon to rescue and sustain animals, and not just for marquee breeds like pandas and rhinos but also for all manner of mammals, frogs, birds and insects whose populations are suddenly crashing. To conserve animals effectively, however, zoo officials have concluded that they must winnow species in their care and devote more resources to a chosen few. The result is that zookeepers, usually animal lovers to the core, are increasingly being pressed into making cold calculations about which animals are the most crucial to save. Some days, the burden feels less like Noah building an ark and more like Schindler making a list. Icahn Takes Chesapeake Energy Stake (WSJ) Carl Icahn skewered Chesapeake Energy Corp.'s CHK board for corporate governance controversies and "irresponsible actions" while disclosing he acquired a sizeable new stake in the company. Euro Likely Worthless as Collector's Item (Bloomberg) FYI. JPMorgan Beefs Up China Unit With $400 Million Injection (Reuters) "The additional capital will better position the bank in the evolving regulatory environment and cement our commitment to clients in China," Zili Shao, Chairman and chief executive of J.P. Morgan China, said in a statement on Monday. "The capital will be used to expand the bank's branch network, develop products, increase corporate lending, and recruit employees," Shao added. Europe Turns To US For Loans (WSJ) In the latest symptom of Europe's financial turmoil, the region's riskier companies are bypassing banks and investors at home and turning to the U.S. for loans. European companies borrowed some €14.4 billion (about $18 billion at current rates) in the U.S. leveraged-loan market this year through Friday, more than double the €6.7 billion for all of 2011, according to data from S&P Capital IQ LCD. That is the highest amount since at least 2007, the height of the last boom in leveraged lending, when full-year loan volume was €12.2 billion, according to S&P. How Boaz Weinstein And Hedge Funds Outsmarted JPMorgan (NYT) By May, when fears over Europe’s debt crisis again came to the fore, the trade reversed. The London Whale was losing. And Mr. Weinstein began to make back all of his losses — and then some — in a matter of weeks. Other hedge funds were also big winners. Blue Mountain Capital and BlueCrest Capital, both created by former JPMorgan traders, were among those winners. Lucidus Capital Partners, CQS and a fund called III came out ahead, too. Inside the hedge fund world, some joked that Mr. Weinstein had been able to spot the London Whale because he himself had been a whale once, too. Drunk Brooklyn woman crashes car through Long Island home (NYDN) A drunken Brooklyn woman crashed her Mercedes into a Long Island home Monday, smashing through the house and landing in the backyard, cops said. Sophia Anderson, 21, failed to turn left or right when the road she was driving on in Huntington deadended at a T-intersection with another street, officials said. She left a train of wreckage as she smashed through the modest house on Southdown Rd., missing the 90-year-old homeowner and her caretaker. Anderson, treated and released at Huntington Hospital, was arrested and charged with driving while intoxicated, police said.

Opening Bell: 12.04.12

Banks Rediscover Money Management Again As Trading Declines (Bloomberg) Global banks, forced by regulators to reduce their dependence on profits from high-risk trading, have rediscovered the appeal of the mundane business of managing money for clients. Deutsche Bank is now counting on the fund unit it failed to sell to help boost return on equity, a measure of profitability. UBS is paring investment banking as it focuses on overseeing assets for wealthy clients. Goldman Sachs, JPMorgan Chase and Wells Fargo, three of the five biggest U.S. banks, are considering expanding asset- management divisions as they seek to grab market share from fund companies such as Fidelity Investments. “Asset management is a terrific business,” said Ralph Schlosstein, chief executive officer of Evercore Partners Inc., a New York-based boutique investment bank that last month agreed to buy wealth manager Mt. Eden Investment Advisors LLC. “Asset managers earn fees consistently without risking capital. Compare that to other businesses in the financial services.” Hedge Funds Win as Europe Will Pay More for Greek Bonds (Bloomberg) Hedge funds drove up prices for Greek sovereign debt last week after determining that European finance ministers would back off a pledge to pay no more than about 28 percent of face value to retire the nation’s bonds. Money managers correctly wagered that not enough bondholders would participate at that level to get the deal done. That would put at risk bailout funds that Greece needs to stave off economic collapse. Transactions involving Greek bonds “increased by the day” after it became clear that the buyback was going to happen, with hedge funds accounting for most of the purchases, said Zoeb Sachee, the London-based head of European government bond trading at Citigroup Inc. “If all goes according to plan, everybody wins,” Sachee said. “Hedge funds must have bought lower than here. If it isn’t successful, Greece risks default and everybody loses.” GE's Swiss lending unit for sale, UBS to bid (Reuters) General Electric Co wants to sell its Swiss consumer lending business, two sources familiar with the matter said, with UBS one of the parties interested in a deal that could be worth up to 1.5 billion Swiss francs ($1.62 billion). The sources told Reuters that UBS was one of at least two parties who plan to submit bids in an auction process. "GE wants to finalize the sale of GE Money Bank by the end of the first quarter," said one of the sources. Brian Moynihan: 'Fiscal Cliff' Repercussions Could Stretch in 2014 (CNBC) "I'm more concerned about business behavior slowing down than I am about consumer behavior," Moynihan told "Squawk Box." "I think we're in danger if this thing strings out into 2013 that you could start to have problems of what 2014 would look like." Icahn Fails In Oshkosh Tender Offer (WSJ) The activist investor was tendered only a meek 22% of shares in an offer he used essentially as a proxy for whether shareholders would support his board nominees. Icahn, who had pledged to drop the offer and his proxy fight if he didn’t receive at least 25% of shares tendered, says he is indeed dropping the tender offer. Ex-baseball star Lenny Dykstra sentenced in bankruptcy fraud case (Reuters) Lenny Dykstra, the 1980s World Series hero who pleaded guilty earlier this year to bankruptcy fraud, was sentenced on Monday to six months in federal prison and ordered to perform 500 hours of community service. The 49-year-old former ballplayer - who is already serving time in state prison for grand theft auto, lewd conduct and assault with a deadly weapon - was also ordered to pay $200,000 in restitution. In the federal case, Dykstra pleaded guilty in July to bankruptcy fraud and other charges. According to the written plea agreement, he admitted defrauding his creditors by declaring bankruptcy in 2009, then stealing or destroying furnishings, baseball memorabilia and other property from his $18.5 million mansion. Teacher disciplined for receiving foot massages from students (SLT) A Taylorsville Elementary School teacher has returned to his third-grade classroom after being disciplined for violating professional standards after students reported they scratched his back, rubbed his feet and had other inappropriate contact while at school. Granite School District officials found no criminal conduct by elementary teacher Bryan Watts, 53, who has worked at the school since 2004, but the district claims to have taken "appropriate disciplinary action" following complaints about Watts...Granite District police Detective Randall Porter started an investigation into Watts’ conduct Oct. 9 after a mother expressed concern to the district after her daughter reported odd classroom behavior by Watts. "She complained that her daughter [name redacted] told her that Watts asks students to rub his feet and back during ‘movie time,’ that Watts told the class that they should not tell their parents about activities that happen in the classroom, and that Watts scared a student by hitting a hammer on the student’s desk," Porter wrote in his 19-page report...officials also said there were student statements about odd activities, including playing dodgeball in Watts’ classroom. Knight Capital May Go It Alone (NYP) Knight Capital’s board emerged from another meeting yesterday to review dueling takeover offers without making a decision. Both Getco and Virtu Financial have made bids for the Jersey City, NJ-based Knight, which had to be bailed out several months ago after a $460 million trading glitch nearly tanked the firm. “[Knight] can still decide to remain independent. That’s a real possibility,” said one source familiar with the bidding process. Top US Firms Are Cash-Rich Abroad, Cash-Poor At Home (WSJ) With billions of dollars overseas that may never come back, the Securities and Exchange Commission is concerned that companies haven't been presenting investors with an honest appraisal of their liquidity. As a result, regulators are pressing companies to more clearly lay out how much of their cash is in the U.S. and how much is overseas and potentially encumbered by U.S. taxes. UBS Near Libor Deal (Reuters) UBS is nearing a deal to settle claims some of its staff manipulated interest rates, and could reach agreement with US and British authorities by the end of the year, a source said yesterday. Britain’s Barclays was fined $453 million in June for manipulating Libor benchmark interest rates, and remains the only bank to settle in the investigation, which led to the resignation of the bank’s chairman and CEO. Calpers Crusader Takes Aim At Fees (WSJ) Mr. Desrochers, a 65-year-old native of Canada who last year became head of private-equity investing for the California Public Employees' Retirement System, has told buyout funds to reduce fees if they want cash from the $241 billion pension goliath, one of the nation's largest private-equity investors. He has pushed for Calpers to pay management fees below the industry's standard of 1% or more and asked for performance fees below the usual 15% to 20% of gains, according to people who have dealt with him. Mike Tyson: Brad Pitt Had Sex With My Wife (NYP) Mike Tyson claims that he caught Pitt having sex with his ex-wife, Robin Givens, while they were in the middle of their divorce in the late eighties. Tyson, who was shortly married to Givens from 1988 to 1989, said he and the actress were still sleeping with each other during their separation. "I was getting a divorce, but... every day, before I would go to my lawyer's office to say 'she's a pig and stealing,' I would go to her house to have sex with her," Tyson said on the Yahoo! Sports show “In Depth with Graham Bensinger.” "This particular day, someone beat me to the punch. And I guess Brad got there earlier than I did." How did the heavyweight boxer react? "I was mad as hell...You should have saw his face when he saw me," Tyson said.

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Opening Bell: 6.29.16

Moody's downgrades 12 UK banks; Soros bets against Deutsche Bank; Saudi Arabia beating off bankers with a stick; Cops say woman wielded hatchet after her demands for sex were rebuffed; and more.

Opening Bell: 4.18.16

Morgan Stanley beats estimates; Osborne says UK economy faces permanent hit with Brexit; Owl's ring delivery goes spectacularly wrong at Canadian wedding; and more.

Opening Bell: 03.20.13

JPMorgan Bosses Hit By Bank Regulator (WSJ) JP Morgan was downgraded in a confidential government scorecard over concerns about the company's management and its board, a blow to a firm that has long been considered one of the best-run on Wall Street. The New York company's management rating from the Office of the Comptroller of the Currency fell one notch last July to a level that signifies oversight "needs improvement," following the revelation of what are known as the "London whale" trading losses, said people familiar with the regulatory assessment. Grading is on a scale of 1 to 5, with 5 being worst. J.P. Morgan had been at level 2, indicating "satisfactory management." The people said the downgrade to level 3 wasn't solely related to a London employee's large trades—in indexes tracking the health of a group of companies—that led to losses exceeding $6 billion. BlackRock’s CEO Fink Says Cyprus Is Not a Major Problem (Bloomberg) Laurence D. Fink, chief executive officer of BlackRock, the world’s largest asset manager, said Cyprus is not a major problem and U.S. equities will rise 20 percent this year as the economy rebounds. “It has some symbolism impact on Europe, but it’s not a really major economic issue,” Fink said of Cyprus in a Bloomberg Television interview in Hong Kong today. “It’s a $10 billion issue. It does remind us of the frailty of Europe. It does remind us that the European fix will be multiple years.” Freddie Mac Sues Big Banks (WSJ) sued more than a dozen of the world's biggest banks for alleged manipulation of interest rates, in the first government-backed private litigation over the rate-rigging scandal. The lawsuit, filed in U.S. District Court for the Eastern District of Virginia, by the mortgage-finance giant joins scores of other suits piling up in U.S. courts, seeking billions of dollars in damages from banks that allegedly manipulated the London interbank offered rate and other crucial financial benchmarks. Freddie Mac sued the British Bankers' Association alongside the banks, putting the private association of large British banks for the first time in the cross hairs of a Libor lawsuit. A probe by U.S. and U.K. regulators has uncovered evidence of widespread rate rigging by some traders. Three banks have agreed to pay penalties totaling about $2.5 billion, and about a dozen companies remain under investigation. The BBA has agreed to transfer its responsibility for overseeing Libor to a new operator. Litigation Forces Deutsche Bank to Restate Profits (Reuters) Deutsche Bank cut its previously reported 2012 pretax profit by 600 million euros ($773 million) on Wednesday, hit by new charges related to mortgage-related lawsuits and other regulatory investigations. Europe's biggest bank by assets declined to say why it had increased litigation provisions to 2.4 billion euros, forcing it to correct its Jan. 31 earnings report which already showed the worst quarterly loss in four years. Yoga-Pants Supplier Says Lululemon Stretches Truth (WSJ) A Taiwanese supplier to Lululemon Athletica was bent out of shape on Tuesday after the yoga-clothes retailer blamed it for producing a shipment of pants that were unacceptably see-through. The supplier, Eclat Textile Co. of Taiwan, hit back at Lululemon, saying the clothes it shipped weren't "problematic." "All shipments to Lululemon went through a certification process which Lululemon had approved," Eclat Chief Financial Officer Roger Lo said in an interview. "All the pants were manufactured according to the requirements set out in the contract with Lululemon." Bernanke Seen Keeping Up Pace of QE Until Fourth Quarter (Bloomberg) The Fed chief will probably halt the unprecedented easing in the first half of next year after expanding central bank assets to a record of about $4 trillion, according to median estimates by 46 economists surveyed March 13-18 before a two-day meeting of policy makers ending today. Unemployment will have fallen to 7.3 percent from its current 7.7 percent when the Fed starts to pull back on its buying, the economists said. Supreme Court Sacks Goldman (NYP) The Supreme Court yesterday refused to hear the bank’s appeal of a federal court ruling in a lawsuit alleging it misled investors about dicey mortgage-backed securities. SEC Digging Into Fund Fees (WSJ) The Securities and Exchange Commission is closely scrutinizing the fees and expenses, including travel and entertainment, that hedge funds and private-equity firms charge to their investors. As part of the Dodd-Frank financial law, the SEC now oversees more than 1,500 additional such advisers that were required to register with the agency. In that capacity, the SEC is checking to ensure they are charging their investors reasonable expenses. "Exotic" expenses like travel, entertainment and consulting arrangements are more likely to attract the agency's attention than routine charges like legal and accounting fees, say compliance consultants who advise funds on registration and reporting requirements. A Volatile Investor Buys Into a Softer Approach (WSJ) It has been a long slog for Mr. Hohn, whose fund bets big on a small number of out-of-favor stocks and often holds on for several years. It lost 43% in 2008, among the worst losses by a hedge-fund that year, according to industry-tracker HFR. Hedge funds on average lost 19% that year. Even the Standard & Poor's 500-stock index, which plunged as the economy descended into the worst financial crisis in decades, did better. But with a 30% return in 2012 and a 14% gain this year, TCI has crossed its high-water mark, or the point at which investment gains make up for losses and managers can begin collecting performance fees again, according to clients. "A lot of people wrote me off," Mr. Hohn said in an interview last month. "A lot of people fired us, a few people stuck by us, and we've worked and worked and made it all back for them." JPMorgan, MF Global Trustee Reach $546 Million Settlement (Reuters) As part of a settlement reached with James Giddens, the trustee who is tasked with liquidating MF Global Inc, JPMorgan will pay $100 million that will be made available for distribution to former MF Global customers. JPMorgan will also return more than $29 million of the brokerage's funds held by the bank, while releasing claims on$417 million that was previously returned to Giddens. Man, 18, forbidden from saying 'bingo' for 6 months (NKY) As part of 18-year-old Austin Whaley’s punishment, Kenton District Judge Douglas Grothaus recently ordered the Covington man not to say the word “bingo” for six months. “Just like you can’t run into a theater and yell ‘fire’ when it’s not on fire, you can’t run into a crowded bingo hall and yell ‘bingo’ when there isn’t one,” said Park Hills Police Sgt. Richard Webster, the officer who cited Whaley. On Feb. 9, Webster was working an off-duty security detail at a Covington bingo hall on West Pike Street when Whaley entered the hall with several other youths and yelled “bingo,” Webster said. “This caused the hall to quit operating since they thought someone had won,” Webster wrote on his citation. “This delayed the game by several minutes and caused alarm to patrons.” Webster said the crowd of mostly elderly women did not take kindly to Whaley’s bingo call. “At first, everybody started moaning and groaning when they thought they’d lost,” Webster said. “When they realized it wasn’t a real bingo, they started hooting and hollering and yelling and cussing. People take their bingo very seriously.” Had Whaley apologized for his actions, Webster said he probably would have sent him on his way with a warning. “But he refused to say he was sorry,” Webster said...WhenWhaley appeared in Kenton District Court last week, the judge ordered Whaley: “Do not say the word ‘bingo’ for six months.” The youthful defendant could have faced up to 90 days in a jail and a $250 fine on the misdemeanor charge. So long as Whaley, who had no prior criminal record, doesn’t get into any more trouble within six months, though, the charge will be dismissed.

Opening Bell: 11.02.12

Economy Adds 171,000 Jobs (WSJ) U.S. payrolls increased by a seasonally adjusted 171,000 jobs last month, the Labor Department said Friday. The politically important unemployment rate, obtained by a separate survey of U.S. households, rose one-tenth of a percentage point to 7.9%. Economists surveyed by Dow Jones Newswires expected a gain of 125,000 in payrolls and a 7.9% jobless rate. Hedge Fund Cashes In On Greek Bonds (Reuters) London-based hedge fund Adelante Asset Management has made a 70 percent gain on a sale of Greek bonds, showing the potential for big profits from betting on a recovery in the fortunes of a country effectively off-limits to investors a few months ago...Since the restructuring, Greek government bond prices have strengthened, allowing Adelante to sell them for around 24 cents on the euro, having bought them for around 14 cents in June, the company said. A Greek government bond maturing in 2042, for example, is currently trading at around 20.8 cents on the euro, Thomson Reuters data shows. Other hedge funds have made similar bets. Third Point, a high profile New York hedge fund, for example, has been a significant buying of cut-price Greek bonds. RBS Eyes Libor Settlement Soon (WSJ) RBS wants to seal a settlement with regulators over its alleged rigging of key interest rates in the coming months, as the partstate-owned bank looks to draw a line under the scandal. Speaking to reporters at the bank's third-quarter results presentation, Chief Executive Stephen Hester said he would be "disappointed" if he couldn't provide details on a settlement by February. "We are up for settling with all and everyone as soon as they are ready. But each regulator has to satisfy itself that it has all the facts," he said. Deutsche Bank Faces Top Surcharge as FSB Shuffles Tiers (Bloomberg) Deutsche Bank would be required to hold more capital and Bank of America Corp.’s burden stands to be reduced as global regulators shuffled the competitive balance among the world’s biggest banks. Citigroup, HSBC and JPMorgan join Deutsche Bank as firms that will be targeted for a capital surcharge of 2.5 percent, according to an updated list published yesterday by the Financial Stability Board. The change means Bank of America already exceeds requirements, while Deutsche Bank would be more than 2 percentage points below the new minimum of 9.5 percent. “That limits earnings potential for Citigroup, JPMorgan and Deutsche Bank compared to Bank of America, all other things being equal, so it’s certainly a competitive advantage for them,” said David Kass, a professor at the University of Maryland’s Robert H. Smith School of Business. Short-Sellers of Europe Set to Be Unmasked (CNBC) The European Securities and Markets Authority (ESMA), the EU regulator, has issued new rules on the short-selling of securities indicating that anyone with short positions of greater than 0.2 percent in an EU company’s shares must report it to regulators. Positions of more than 0.5 percent will be publicly released, naming both the company and the short-seller. Public disclosure is triggered any time that level is hit with each 0.1 percent increase or decrease after that. NYSE Open For Business Shows Wall Street Still Vulnerable (Bloomberg) The Securities and Exchange Commission may consider whether exchanges’ emergency regimens need to be bolstered, according to a person familiar with the regulator’s thinking who asked not to be named because the matter is private. The industry’s decision to halt equities and bond trading shows the challenge of maintaining markets when a catastrophe threatens New York City, home to 168,700 securities industry workers. “One of the purposes of having electronic exchanges and basing them away from New York City is for the market to be more robust and stay open,” Charles Jones, a finance professor at Columbia Business School in New York, said in a phone interview. “This is what the back-up plans were designed for. But the markets didn’t open.” David Blaine Entertains New Yorkers After Hurricane Sandy (NYP) When a backup generator at Old Homestead Steakhouse sputtered, the restaurant started serving hundreds of pounds of steaks, burgers, lobster tails and shrimp on the street outside for downtown denizens. David Blaine, the modern-day Harry Houdini who spent days recently being shocked in a steel suit, pitched in to provide spontaneous street entertainment. “David was rumbling by on his motorcycle, and he stopped to see why there was a line on 14th Street,” said a spy, adding 800 chowed down. Blaine then asked restaurant co-owner Greg Sherry if there was a deck of cards in the house. Blaine used the full deck and some spare silverware to perform magic tricks outside for an hour and a half. The magic man, an Old Homestead regular, was offered a doggie bag but said he’s on a special diet in preparation for his next stunt. Romney Faces Sale With A Win (WSJ) Mr. Romney's assets, valued at between $190 million and $250 million, include investments in hedge funds, private-equity funds and partnerships at Bain Capital, which he ran for 15 years. These entities have ownership stakes in dozens of companies that could be affected by government action, such as radio firm Clear Channel Communications Inc. and a video-surveillance firm based in China. Many businessmen and wealthy individuals have entered government service and sold off holdings. But a Romney sale would be especially complicated. Investments in private-equity funds can be difficult to value and seldom change hands. Any sale would have to be handled carefully to avoid any appearance that the incoming president was getting favorable treatment from a buyer. What Do Asia Markets Fear? Romney As President (CNBC) At a time of heightened uncertainty, with the ongoing European debt crisis and the upcoming leadership transition in China, a new president in the world’s largest economy will cause additional nervousness among Asian investors, experts told CNBC. “Asian traders don’t like change in leadership. You would see weakness in the markets if Romney won, because people would question how well he would deal with the impending doom of the ‘fiscal cliff.’ Obama would be a safer bet, as investors would enjoy continuity at a time of a lot of uncertainty,” said Justin Harper, market strategist, at IG Markets...Besides, Romney’s stance on China is particularly worrying feels Harper. The presidential hopeful has said he will name China a “currency manipulator,” which could lead to more tensions with the mainland, including on the trade front. “You would expect trade between the two nations to suffer, this would have a knee-jerk reaction on trade in the region,” he added. Fed Up With Fees (NYP) The manager of a large public pension’s private-equity program said for the last 24 months he has not committed money to any new private-equity fund that doesn’t give all fees it charges its companies back to investors. He is doing this because he wants an alignment of interest where he and the private-equity firm only make money by reselling a business. PE firms, he believes, will stop charging their companies fees if there is little in it for them. So, KKR, for example — responding to pressure — has agreed to give all fees it charges its companies in its new fund back to investors, the pension manager said. KKR is not the only firm making this change. Apax Partners, Blackstone Group, Centerbridge Partners, Providence Equity and TPG Capital are among those making the same concessions, the pension manager said. Local shelter mistakenly euthanizes family pet (WRCB) After waiting 10 days to be reunited with his dog, a local college student learned the family's pet had been euthanized by mistake. The Lab mix was being held at McKamey Animal Center, where administrators say a paperwork mix up led to the dog's death. Matt Sadler adopted the three-year-old Lab mix when he was just a puppy. "That was my best friend," Sadler says. "He was there for me through my parents' divorce and a lot of really hard tough times in my life." It was hard for Matt when Zion was quarantined last week, after jumping on a pizza delivery driver. "The lady didn't want to press charges, it wasn't anything serious, but the law has a 10-day quarantine period," he says. Because Zion was a month past due on his yearly rabies vaccine, he was held for the full 10 days at McKamey Animal Center. Thursday, Matt eagerly returned to the facility to take Zion home. "She says, ‘I'm sorry, Matt, we accidentally euthanized your dog'," Sadler says...McKamey has offered to cremate Zion, and allow Matt to adopt any dog he chooses.

Opening Bell: 12.07.12

SEC Warns Netflix CEO Over Facebook Post (WSJ) Mr. Hastings boasted on his Facebook page in July that Netflix exceeded 1 billion hours of video streaming in a month for the first time. The post may have violated rules of fair disclosure, the SEC said. The SEC said it may also issue a cease-and-desist proceeding against Netflix and Mr. Hastings. Mr. Hastings responded in another Facebook post Thursday. He said further disclosure at the time wasn't necessary because he has more than 200,000 subscribers to his Facebook page, which makes it a "very public" forum. Netflix had also disclosed on its blog in June that it was nearing the 1 billion streaming hours milestone, he said. Mr. Hastings, who is also on the board of Facebook, added that, at any rate, such information isn't a "material" event to investors. Germany's Central Bank Cuts Forecasts (WSJ) "The cyclical outlook for the German economy has dimmed [and] there are even indications that economic activity may fall in the final quarter of 2012 and the first quarter of 2013," the Bundesbank said in its monthly report. In its semiannual economic projections, the central bank slashed its forecast for German growth next year to 0.4% from its previous estimate of 1.6% in June. It also lowered its forecast for 2012 growth to 0.7% from 1.0%. Moody's: It's Deal Or Die (NYP) The American economy will fall into “severe recession by the spring” unless Congress lessens the tax increases and spending cuts that are set to begin in January, said Mark Zandi, chief economist at Moody’s Analytics. “We’ve got to nail this down; uncertainty is killing us,” Zandi told lawmakers yesterday at a Joint Economic Committee hearing in Washington...If Congress were to “kick the can down the road” by extending the current tax-and-spend policies, Zandi predicted the US would lose its Aaa rating because “it would signal that the political will is lacking to put the nation on a sustainable fiscal path.” Fiscal Cliff? France Has ‘Fiscal Mountain’: PPR CEO (CNBC) The head of one of France's biggest companies has warned that France's problems dwarf those of the U.S. in an interview with CNBC. Francois-Henri Pinault, chief executive of luxury goods company PPR, said: "When we talk about the fiscal cliff in France it's a mountain, it's much higher than a cliff. And when it comes to France the only solution that has been put on the table is tax raises, nothing about cutting expenses. So it's a completely different situation." Greece sticks to buyback plan, says will shield banks (Reuters) Greece says it is sticking to plans to close its offer to buy back its own bonds from investors on Friday in a deal that should meet a debt writedown target set by its international lenders. The government said it would shield the country's banks from any lawsuits over losses booked if they take part in the buyback. The buyback, part of a broader debt relief package worth 40 billion euros ($52 billion) agreed by Greece's euro zone and International Monetary Fund lenders last month, is central to efforts to bring its debt to manageable levels. Judge: Ganek, Steinberg conspirators (NYP) Manhattan federal judge Richard Sullivan yesterday ruled that SAC Capital money manager Michael Steinberg and Level Global co-founder David Ganek can be named co-conspirators in the current insider trading case unfolding downtown. Neither Steinberg nor Ganek has been charged in the case, but the ruling lets prosecutors submit their e-mails and instant messages as evidence in their case against Todd Newman, a former portfolio manager at Diamondback, and Anthony Chiasson, Ganek’s former Level Global partner. The feds have accused Chiasson and Newman of improperly profiting off insider tips on Dell and Nvidia. Chiasson lawyer Greg Morvillo objected, saying that Chiasson’s former analyst Sam Adondakis, who pleaded guilty, testified that he never told Ganek he had an inside source at Dell. Judge Sullivan said the evidence is “certainly circumstantial” but sufficient enough for the government’s request to be granted. Sullivan cited the “precise information” Ganek had received leading up to Dell’s earnings as well as the “large trading positions” he authorized on the computer maker. The judge relied on three e-mail communications to implicate Steinberg, one of which he said made “clear references to keeping things on the down-low and being extra sensitive.” Burglary suspect calls 911 after Springtown homeowner holds him at gunpoint (DN) In a strange flip of events, a burglary suspect called 911 early Tuesday to report that he was being held at gunpoint by a Springtown homeowner and his son. The homeowner called 911, too, but by then he was in control, holding him at gunpoint and demanding to know what he was doing in his home. “Just unlucky, I guess,” the man responded, according to a release from the Parker County Sheriff’s Department. The incident happened around 12:30 a.m. when the homeowner and his wife woke up to find an intruder in the bedroom of their home in the 100 block of Lelon Lane. The suspect, identified as 41-year-old Christopher Lance Moore of Bedford, left the home and sat in his GMC pickup, parked in the family’s driveway. The homeowner followed him with a pistol, took the suspect’s keys and blocked his getaway with his own vehicle, while his stepson trained a shotgun on Moore, Fox 4 News reports. “If he gets out of the truck, shoot him in the legs,” James Gerow told his son. “You ain’t gotta kill him; just shoot him in the legs. … If he’d got out, I’d have expected him to shoot him.” When deputies arrived, both men were on the phone with 911. Deputies asked Moore why he had broken into the home, to which he merely said he had “bad intentions.” Morgan Stanley Alters Broker Pay Plan as Revenue Bonus Takes Hit (Bloomberg) Morgan Stanley, the brokerage with the biggest corps of financial advisers, changed its wealth- management compensation plan to encourage brokers to increase revenue and allow them to buy discounted stock. The 2013 program pays a bonus of 2 to 5 percentage points of revenue for advisers who bring in new assets and are in the top 40 percent in revenue growth, according to terms outlined in a summary obtained yesterday by Bloomberg News. That comes at the expense of a 2 percentage-point reduction in the revenue bonus paid to all brokers who generate at least $750,000. JPM Bonus Bummer (Bloomberg) JPMorgan Chase’s bonus pool for the corporate and investment bank may shrink as much as 2 percent this year as the firm completes performance reviews, three executives with direct knowledge of the process said. Fed Exit Plan May Be Redrawn as Assets Near $3 Trillion (Bloomberg) A decision by the Federal Reserve to expand its bond buying next week is likely to prompt policy makers to rewrite their 18-month old blueprint for an exit from record monetary stimulus. Under the exit strategy, the Fed would start selling bonds in mid-2015 in a bid to return its holdings to pre-crisis proportions in two to three years. An accelerated buildup of assets would also mean a faster pace of sales when the time comes to exit -- increasing the risk that a jump in interest rates would crush the economic recovery. A decision by the Federal Reserve to expand its bond buying next week is likely to prompt policy makers to rewrite their 18-month old blueprint for an exit from record monetary stimulus. Under the exit strategy, the Fed would start selling bonds in mid-2015 in a bid to return its holdings to pre-crisis proportions in two to three years. An accelerated buildup of assets would also mean a faster pace of sales when the time comes to exit -- increasing the risk that a jump in interest rates would crush the economic recovery. Danger Lurks Inside The Bond Boom (WSJ) Amid the rush of bond deals, which already have topped $1 trillion in value, these managers—from BlackRock to Federated Investment Management Co.—are pointing to unusual wrinkles suggesting that now could be one of the most dangerous times in decades to lend to investment-grade companies. Interest rates are so low and bond prices so high, they warn, that there is little room left for gains. Some worry that even a small increase in interest rates—a traditional enemy of bond returns—could eat away at bond prices. College Student Poisons Roommate's Iced Tea With Bleach Following Argument (DM) A college student faces 15 years in jail after she allegedly sprayed bleach into her roommate's iced tea. Kayla Ashlyn Bonkowski, 19, was charged with felony poisoning and appeared in court on Wednesday. She reportedly told police that she had put chemicals in the drink following an argument about cleaning the dishes with her 20-year-old roommate Emily Joseph. The poisoning occurred on November 7 at the students' apartment in Union Township, located near the Mount Pleasant school of Central Michigan University, authorities said. Miss Joseph was taken to hospital for treatment but later released. After she filed a complaint, Bonkowski was arrested. The 19-year-old 'verbally admitted' to police that she put bleach in the drink because 'Joseph is mean', according to ABC. She was arraigned on Wednesday at 2pm before posting $2,000 bond. She entered a plea of not guilty to the charge of poisoning a food, drink, medicine or water supply. The college student faces up to 15 years in prison. Reached by e-mail, Bonkowski said on Wednesday morning that she needed to consult with a lawyer before commenting.

Opening Bell: 10.04.12

France’s LBO Firms See ‘Death’ From Hollande’s 75% Carry Tax (Bloomberg) Hollande, who released his first annual budget on Sept. 28, plans to tax fund managers’ share of the profit from their investments, known as carried interest, at a rate of as much as 75 percent, part of a wider effort to increase taxes on the wealthy and narrow the country’s deficit. France also plans to as much as double taxes on capital gains and restrict the amount of debt interest payments a company can deduct from its taxable income, a measure that will reduce returns on leveraged buyouts. Facebook Test Turns Users Into Advertisers (FT) Facebook is testing a new product in the US that allows ordinary users to pay to promote their own status updates, marking a shift in the social network’s willingness to charge its users for a core service. The product has potential to generate revenues, analysts said, but could also threaten the organic feel of the site as people pay to market their own social lives. Mark Zuckerberg Confirms: 'I wear the same thing everyday' (DL) "I mean, I wear the same thing every day, right? I mean, it's literally, if you could see my closet," Zuckerberg starts to explain, as Lauer asks if he owns 12 of the same gray t-shirt. "Maybe about 20," Zuckerberg admits, somewhere between discussing the future of Facebook, his daily routine, the iPhone 5, and his wedding to college sweetheart Priscilla Chan last May. The Facebook CEO says that he doesn't really have much in his closet — it's mainly used by his wife, who graduated from medical school at the University of California at San Francisco shortly before their marriage. Instead, Zuckerberg's identical t-shirt collection lives in the one drawer he's allotted. Tiger Global Up 22.4 Percent (Reuters) Tiger Global, one of the world's best-performing hedge funds, ended the third quarter with strong gains, leaving the fund up 22.4 percent for the year, two people familiar with the numbers said on Wednesday. The roughly $6 billion fund, run by Chase Coleman and Feroz Dewan, has been the darling of the investment community for its string of strong returns at a time when the average hedge fund is delivering only low single-digit returns. In 2011, when most funds nursed losses, Tiger Global captured headlines with a 45 percent gain for the year after having made a good chunk of money on the short side, people familiar with the portfolio said. 'Dark Pool' And SEC Settle (WSJ) The Securities and Exchange Commission alleged in its order that Boston-based broker-dealer eBX LLC allowed the third-party operator of its trading platform, called LeveL ATS, to use details on client orders, including the stocks involved and whether they were buy or sell orders, to its own advantage. That operator is Lava Trading, an electronic-trading unit of Citigroup, according to eBX. eBX agreed to pay $800,000 to settle the SEC's allegations. It did so without admitting or denying wrongdoing. Mohamed El-Erian: No corner offices at PIMCO (Fortune) "It doesn't matter whether you're CEO or whether you're an associate, you have the same size office. No corner offices. Just a conference room. And then I knew that I had made the right decision when my very first outing with PIMCO, I had come from the IMF, 15 years working on emerging markets. I had a swagger, I thought I knew what I was talking about. I put forward my view, and this summer intern felt safe enough to get up and say, "You know what? Mohamed is wrong and this is why he's wrong." The fact that PIMCO had created this safe zone where a summer intern could get up and question someone who was supposed to be an expert confirmed to me that I was in the right place." Bank-Friendly U.S. Regulator Shifts Focus to Revamp Reputation (Bloomberg) In a stately hearing room stuffed with senators and bankers, Thomas Curry began his apologies. His agency should have stopped a major bank from helping drug cartels launder cash. The violations went on for years while his agency was overly passive. “I deeply regret we did not act sooner,” he said. Curry had been on the job for just over three months on that day in July, so the mistakes hadn’t been made on his watch. His apologies were less a confession than a signal the new Comptroller of the Currency -- long seen as the most bank- friendly of U.S. regulators -- was changing course. “I’m not interested in what people thought about in the past,” Curry said in an interview. “My focus is going forward.” Since he took over in March, at least two key staff members closely associated with the agency’s pro-industry stance have departed, notably chief counsel Julie Williams. Williams, a 19- year OCC veteran, was known for helping nationally chartered banks resist state regulation by arguing they were preempted by often less-stringent federal rules. Curry has also raised the profile of consumer protection and shifted focus toward “operational risk” -- the idea that bank practices and management can pose as much of a threat to safety and soundness as external forces. Argentine Navy Ship Seized In Asset Fight (FT) An Argentine naval vessel crewed by more than 200 sailors has been seized in Ghana as part of an attempt by the US hedge fund Elliott Capital Management to collect on bonds on which Buenos Aires defaulted in 2001. A Ghanaian court ordered an injunction and interim preservation order against the ARA Libertad, a 100-metre long tall ship, following an application by Elliott subsidiary NML Capital on Tuesday. The hedge fund, run by the US billionaire Paul Singer, has been closely monitoring the course of the Libertad, according to sources familiar with the firm. Elliott had been waiting for the ship to stop in a port where it would have a chance to enforce legal judgments previously awarded by UK and US courts. The hedge fund declined to comment. Argentina slammed the interception of the Libertad as a “trick which these unscrupulous financiers” had pulled, adding that it “violates the Vienna Convention on diplomatic immunity”. Morgan Stanley commodities talks with Qatar hit snag (Reuters) Morgan Stanley's talks with Qatar's sovereign wealth fund over the sale of its commodities business have run into difficulty, and the deal may need to be reworked if it is to go ahead, banking sources said. One of the top banks in commodity trading over the past 30 years, Morgan Stanley has been in discussion for more than a year with Qatar over the sale of at least a majority stake in the energy-focused trading business, the bankers said. "There have been some differences, and Qatar is a bit lukewarm about it," one said. "It's not dead yet but definitely not imminent." Maple syrup stolen in Quebec seized by police in New Brunswick (The Star) Quebec police have seized between 700 and 800 barrels of maple syrup from a New Brunswick exporter, linking the drums to August’s massive heist of the sweet stuff. Étienne St-Pierre, owner of S.K. Exports in Kedgwick, N.B., told the Star that police executed a search warrant Sept. 26 and hauled away the barrels. “They said they were searching to find some stolen drums from Quebec,” he said. “It was a surprise. That was the first news I received.” St-Pierre said each barrel weighs about 270 kilograms and holds 170 litres of syrup, meaning police seized at least 119,000 litres of gooey Quebec gold. A spokesperson for the Sûreté du Québec, Sgt. Bruno Beaulieu, confirmed a search warrant had been executed in Kedgwick but said he could not comment on the investigation. The Federation of Quebec Maple Syrup Producers has never revealed the amount of syrup stolen from its secure St-Louis-de-Blandford, Que. warehouse in August. The facility held about 3.75 million litres of syrup, enough to fill one and a half Olympic swimming pools. St-Pierre said he obtained the barrels from a regular Quebec supplier, who he refused to identify.