Opening Bell: 5.10.16

U.S. investigating Citadel, KCG; ; BofA says U.S. stocks headed straight to hell; The Dan Loeb of Japan; Kid finds Mayan settlement while messing around on Google Maps; and more.
Author:
Updated:
Original:

Credit Suisse Swings to Loss but Wealth Unit Upbeat (WSJ)
Investors, who had been braced for a poor investment bank result, focused on more upbeat figures for Credit Suisse’s wealth management units and traded shares of the lender up 4%. Zurich-based Credit Suisse reported a first-quarter net loss of 302 million Swiss francs ($311 million), compared with a profit of 1.05 billion francs in the same period last year. Net revenue fell 30% to 4.64 billion francs.

This Activist Investor Doesn’t Have Time for Japan’s Nice Meetings (Bloomberg)
Tsuyoshi Maruki stands out like a lone wolf in Japan, where societal intolerance for aggressive shareholder campaigns has spurred a breed of friendly activists. Not Maruki. Where persuasion doesn’t work, he turns to techniques that include banding with other investors to oust management and filing lawsuits to overhaul corporate practices in order to boost returns for his 9.7 billion yen ($90 million) fund. “If one always adopts a friendly engagement style, such as having gentle and warm meetings, would the management really change?” said Maruki, 56, who founded Tokyo-based Strategic Capital Inc. in 2012. “After the meeting, it would probably end at a comment like, ‘They were nice.’"

Bank of America: 'Vortex of Negative Headlines' to Send U.S. Stocks Plummeting (Bloomberg)
In an appearance on BloombergTV on Monday, Savita Subramanian, Bank of America Merrill Lynch's head of U.S. equity & quantitative strategy, warned of a "vortex of negative headlines" coming in June that could soon push the S&P 500 to 1,850—back near its February lows. Among the factors she cited are the upcoming 'Brexit' vote, the June decision from the Federal Reserve, and the U.S. election.

U.S. investigates market-making operations of Citadel, KCG (Reuters)
Federal authorities are investigating the market-making arms of Citadel LLC and KCG Holdings Inc, looking into the possibility that the two giants of electronic trading are giving small investors a poor deal when executing stock transactions on their behalf. The Justice Department has subpoenaed information from Citadel and KCG (KCG.N) related to the firms' execution of stock trades on behalf of clients, according to people familiar with the investigation.

Judge spent 30 years trading sexual favors for lighter sentences (NYP)
Part-time Cross County District Judge Joe Boeckmann resigned after a state judicial commission presented him with new allegations, including one case when a man said he was taken to a courtroom, told to strip naked and photographed in handcuffs. Allegations were made public last year that Boeckmann had engaged in inappropriate sexual relationships including photographing and paddling defendants in exchange for lighter sentences.

Panama-Leak Database Makes 200,000 Shells Searchable Online (Bloomberg)
A searchable database of more than 200,000 Panamanian shell companies was released online Monday afternoon, as part of an international journalism group’s effort to reveal the secrets of the offshore financial world. The database features information derived from millions of leaked documents created by the Panamanian law firm Mossack Fonseca, which specialized in setting up secret shell companies for clients ranging from corporate executives and wealthy celebrities to relatives and associates of heads of state like Russian President Vladimir Putin and British Prime Minister David Cameron.

More Reserve Currencies Would Bolster System, Fed’s Dudley Says (WSJ)
“Will more reserve currencies strengthen the international monetary system? My answer can be summed up in one word: yes,” said Mr. Dudley in remarks prepared for the High-Level Conference on the International Monetary System in Zurich. “The greater the number of countries that have such attributes [meeting the criteria of reserve currencies], the more stable and sound the global financial system is likely to be,” he said in remarks for the conference, which is co-sponsored by the International Monetary Fund and the Swiss National Bank.

Robin Hood Gala Raises $61 Million (Bloomberg)
The Robin Hood Foundation, dedicated to fighting poverty in New York City, took in about $61 million at its annual fundraiser with the help of wealthy donors from the financial industry and beyond. That’s less than last year’s $101 million, when two donors chipped in $50 million to smash the record. But it’s a bit more than the year before, when times were better by many measures. The decade’s low was $47 million in 2011.

Kid finds Mayan settlement while messing around on Google Maps (NYP)
A Canadian teenager has uncovered the remains of a lost Mayan city using only the night sky. William Gadoury, 15, named the city K’aak Chi or Fire Mouth, which could be the largest Mayan settlement ever discovered. After hours of study, the teen realised that the ancient people built their settlements according to the stars. He carefully analysed 22 constellations known to the Mayans and found that their position matched where the biggest cities were. His theory linked the constellations to 117 Mayan cities spread around Central and South America.

Related

Opening Bell: 5.7.15

Billions in FX settlements coming; Dan Loeb rips Warren Buffett; Lagarde comes down on banker pay; UBS bankers turned restauranteurs; "Naked Man Threatens Neighbors With AK-47"; and more.

Opening Bell: 3.28.16

Dan Loeb warns Seven‐Eleven Japan; American Psycho is back; Cupcake the cat survives 260-mile, 8-day journey through the mail; and more.

Getty Images

Opening Bell: 7.27.16

Goldman is sued in U.S. over merger linked to Malaysia's 1MDB; Dan Loeb had a nice little first half; Man leaves clothes in pub as he goes to get cash; and more.

Opening Bell: 12.20.12

Report Says Libor-Tied Losses at Fannie, Freddie May Top $3 Billion (WSJ) Fannie Mae and Freddie Mac may have lost more than $3 billion as a result of banks' alleged manipulation of a key interest rate, according to an internal report by a federal watchdog sent to the mortgage companies' regulator and reviewed by The Wall Street Journal. The unpublished report urges Fannie and Freddie to consider suing the banks involved in setting the London interbank offered rate, which would add to the mounting legal headaches financial firms such as UBS AG and Barclays face from cities, insurers, investors and lenders over claims tied to the benchmark rate. Libor Documents May Boost Civil Suits (WSJ) Analysts have published a range of estimates of the potential impact to the industry of lawsuits stemming from the manipulation—in some cases they reach into the tens of billions of dollars or more. It likely will be years before the extent of any liabilities becomes clear. For the lawsuits to succeed, plaintiffs must prove that banks successfully altered the interest-rate benchmarks and caused the plaintiffs to suffer a loss. Michael Hausfeld, chairman of Hausfeld LLP, a co-lead counsel on one of the lawsuits, said the UBS settlement was "extremely useful" for the litigation. The "extraordinary emails" published by the regulators exposed the "pervasiveness of the culture and the activity." UBS Trader Hayes Exposed at Core of Libor Investigation (Bloomberg) Tom Hayes, one of two former UBS AG traders charged by U.S. prosecutors, is portrayed by American regulators as the kingpin of a three-year campaign that succeeded in manipulating global interest rates. Hayes, 33, was charged with wire fraud and price-fixing, the Department of Justice said in a criminal complaint unsealed yesterday. The trader and Roger Darin, a former short-term interest-rates trader at UBS whose responsibilities included the firm’s yen Libor quotes, were also charged with conspiracy...Hayes colluded with brokers, counterparts at other firms and his colleagues to manipulate the rate, the Justice Department said. Between 2006 and 2009, a UBS trader made at least 800 requests to the firm’s yen Libor rate-setters, about 100 to traders at other banks, and 1,200 to interdealer brokers, according to the Commodity Futures Trading Commission, which didn’t identify Hayes by name. “Many UBS yen derivatives traders and managers were involved in the manipulative conduct and made requests to serve their own trading positions’ interests,” the CFTC said. “But the volume of unlawful requests submitted by one particular senior yen derivatives trader in Tokyo dwarfed them all.” IntercontinentalExchange Agrees to Acquire NYSE Euronext (Bloomberg) IntercontinentalExchange Inc., the 12-year-old energy and commodity futures bourse, agreed to acquire NYSE Euronext for cash and stock worth $8.2 billion, moving to take control of the world’s biggest equities market. ICE, based in Atlanta, will pay $33.12 a share for the owner of the New York Stock Exchange, 38 percent above yesterday’s closing price, according to a statement today. Both boards approved the proposal and the companies expect to complete the transaction in the second half of 2013. Last year, the U.S. Justice Department blocked a joint hostile bid by ICE and Nasdaq OMX Group for the New York-based company on concern the combination would dominate U.S. stock listings. Greece Faces 'Make or Break' Year (FT) We can make it next year if we can stick to the program agreed with the EU and IMF," finance minister Yannis Stournaras said in an interview with the Financial Times. However, "the break would be if the political system finds the situation too difficult to handle", he added, referring to the danger of social unrest about austerity that could force the two left-of-center parties to bring down the governing coalition. "What we have done so far is necessary but not sufficient to achieve a permanent solution for Greece," Mr Stournaras said. "The issue now is implementation." Boehner's 'Plan B' Gets Pushback (WSJ) The mood at the White House was gloomy, while on Capitol Hill it fluctuated. Few seemed confident the nation would avoid the tax increases and spending cuts known as the fiscal cliff, but others noted major Washington deals are usually reached only after several near-death experiences. Preparing for the World's End, Just in Case (WSJ) Tony Brown, a private investigator in Southern California, says he has spent nearly $60,000 preparing for Teotwawki — an acronym for "the end of the world as we know it"—or SHTF—when the "s--- hits the fan." Mr. Brown has purchased an ultralight plane and amassed three tons of food in his kitchen, about a third in freeze-dried meals. About a year ago, Mr. Brown started a website to recruit a community of preppers to plan for a cataclysm. In the first several months, he said he received few inquiries. But by the summer, traffic to the site soared and applications have come rolling in since. He recently capped the group at 175 members—all are responsible for their own one-year supply of food—though he is still seeking a doctor, meteorologist and ham-radio operator. Mr. Brown has contingency plans for four doomsday scenarios he deems most likely—a supervolcano, solar flare, major earthquake or hyper inflation—and a large underground bunker in case of a nuclear attack. He doesn't believe the world will end on Dec. 21, "but, just in case, I want to have everything ready by then," he said. US Economy Grew 3.1%; Jobless Claims Rise (Reuters) Weekly jobless claims rose to 361,000 in the latest week. Claims has been expected to rise to 357,000, from 343,000 the prior week. BofA’s Moynihan Said to Kill Proposal to Cut Pay for Brokers (Bloomberg) Bank of America Corp. Chief Executive Officer Brian T. Moynihan blocked a proposal to cut the main component of most brokers’ pay for 2013, said a person with direct knowledge of the matter. The plan would have reduced the so-called grid payout for Merrill Lynch financial advisers by two percentage points, the person said, requesting anonymity because it wasn’t made public. The changes, which would have affected advisers generating less than $1 million in commissions, were seen as a way to cushion the costs of new bonuses, the person said. In $18 Million Theft, Victim Was a Canadian Maple Syrup Cartel (NYT) It was an inside job of sorts. Thieves with access to a warehouse and a careful plan loaded up trucks and, over time, made off with $18 million of a valuable commodity. The question is what was more unusual: that the commodity in question was maple syrup, or that it came from something called the global strategic maple syrup reserve, run by what amounts to a Canadian cartel. On Tuesday, the police in Quebec arrested three men in connection with the theft from the warehouse, which is southwest of Quebec City. The authorities are searching for five others suspected of being involved, and law enforcement agencies in other parts of Canada and the United States are trying to recover some of the stolen syrup. Both the size and the international scope of the theft underscore Quebec’s outsize position in the maple syrup industry. Depending on the year, the province can produce more than three-quarters of the world’s supply. And its marketing organization appears to have taken some tips from the producers of another valuable liquid commodity when it comes to exploiting market dominance. “It’s like OPEC,” said Simon Trépanier, acting general manager of the Federation of Quebec Maple Syrup Producers. “We’re not producing all the maple syrup in the world. But by producing 70 to 78 percent, we have the ability to adjust the quantity that is in the marketplace.” NYers who believe in Mayan apocalypse search for sex before the world ends (NYP) While some people around the world are arming themselves and digging into bunkers, many New Yorkers are simply hoping for a hot time. “I will be looking for an end-of-the-world hook-up,” Dennis Cintron, 29, a Lower East Side bartender, told The Post. “If you’re going to go out, go out with a bang.” Cintron said he’ll buy new clothes and get a haircut for the big day because he wants some “companionship” to ring in the rapture. Sara Saperstein, 26, of Bushwick is also hoping for one last romp. “It’s like New Year’s. I want to go out on a wild note!” Saperstein said. She won’t have trouble finding a spot for that. More than a dozen bars and clubs in New York City are throwing end-of-days bashes, including a comedy show at the Bell House in Gowanus and an “End of the Funking World Party” at B.B. King Blues Club in Midtown. Other singles posted ads on Craigslist.org and OKCupid.com, seeking apocalypse-themed dates, “casual encounters” and even “end of the world sex.” “If you’ve got no plans for the apocalypse, let’s get together,” wrote a 30-year-old single guy from Midtown. He added, “Send me how you’d like to spend your last hours on earth — and a photo.”

Opening Bell: 07.31.12

RBS Braces Itself For Libor Deal (WSJ) RBS stands apart from the other banks caught up in a trans-Atlantic probe of the rate misdeeds because of the U.K. government's 83% stake in the lender. That has put U.K. authorities in an awkward position: They are under intense pressure to get tough on wayward banks but also are eager to protect the value of a taxpayer asset. Defendant in Insider Case: I Was Just Doing My Job (WSJ) Doug Whitman, a former hedge-fund manager, doesn't deny that he probed public companies for nonpublic information. But his criminal-defense team plans to argue that its client was doing exactly what he was supposed to do when he persuaded employees of public companies to give him information that those companies' top brass didn't want getting out. Mr. Whitman "was doing what every diligent, competent fund manager and analyst should do—checking up on companies' management to make sure they are being forthright with their investors," said David Anderson, Mr. Whitman's lead defense attorney, in an email. Tiger Management Helps Next Generation Funds (NYT) In a relatively young industry where stars can quickly fade, Tiger Management — and its myriad affiliates like Falcon Edge — is the closest thing to a hedge fund dynasty. After a brief career in finance, Mr. Robertson started Tiger in 1980 with seed money from friends and family. He regularly racked up double-digit returns by taking big positions in companies with good long-term growth prospects and aggressively betting against those stocks poised to fall. Mr. Robertson trained his young protégés — the so-called Tiger cubs — in the same tradition, creating the next generation of hedge funds stars. After leaving Tiger in 1993, Lee Ainslie started Maverick Capital, which currently manages roughly $10 billion. Stephen F. Mandel Jr. began Lone Pine Capital in 1997. Two years later, Andreas Halvorsen opened Viking Global. “We really gravitated to young people, and that was a great deal of our success,” said Mr. Robertson, 80, who often hired people in their 20s. “I was just an old goat with all these young geniuses around.” As the first wave of Tiger cubs age, they are breeding new funds, too. Blue Ridge Capital, where Mr. Gerson honed his skills, has been a particularly good incubator for talent. While Blue Ridge has subscribed to the long-term strategy of Tiger, the founder, Mr. Griffin, has infused the firm with his own philosophy. As a proponent of behavioral finance, he trained analysts like Mr. Gerson to identify how ego and emotion can affect the market and stock performance. Biggest Chapter Yet For A Poison Pen (WSJ) Daniel Loeb isn't one given to half-measures. The hedge-fund manager competes in triathlons, never, ever drinks from a plastic water bottle and is unsparing at times in his criticism of corporate executives. That is exactly how his investors like him. "I didn't give him the money to have a mellow Dan Loeb," said Hugh F. Culverhouse, a Miami investor whose family once owned the Tampa Bay Buccaneers football team. "If I want a mellow Dan Loeb, let me redeem."...The Yahoo campaign signals a new phase in Mr. Loeb's career. Until now, he was perhaps best-known for his poison-pen letters, in which he has scolded executives for everything from keeping relatives on the payroll to socializing at the U.S. Open tennis tournament. Armed with a much bigger war chest—Third Point managed just $1.7 billion as of April 2009—Mr. Loeb can now aim for bigger targets. Mr. Loeb and his investors have a lot riding on a Yahoo revival. "If he makes money on his position, it will be good," said David Tepper, a fellow hedge-fund manager who has known Mr. Loeb for years. "If he doesn't make money, what is the point?" British man rescued off French Atlantic coast after being overcome with Olympic mania and trying to swim to America (DM) The unnamed 34 year old holidaymaker told his friends on the beach at Biarritz that he was off to New York to carry the Olympic spirit across the Atlantic. They thought he was joking but knowing that he was a strong swimmer decided to let him go telling him that a boat would come to rescue him if he got into difficulty. The man swam well beyond buoys 300 yards out to sea marking legal limits for bathing. Then, watched by lifeguards on the shore, he continued swimming until he was out of sight on his 3,594-mile journey. The lifeguards called out a helicopter and a diver dropped into the sea and explained to the man that it was not a good idea to swim across the Atlantic and advised him to head back towards France. He replied that he was a strong swimmer and felt up to it. At the same time lifeguards arrived in a rescue dinghy and threw the eccentric a line before towing him back to the beach. Laurent Saintespes, senior officer at Biarritz airbase told Agence France Presse, ‘He was a bit naive. But at a time when the Olympics are taking place in London you have to see the funny side of things’. Billionaire Jeff Greene On Democracy (NYM) Lately—like at a recent lunch with Steve Schwarzman, who has likened Obama to Hitler—Greene’s been trying another tactic. “Now I appeal to them selfishly,” he says. “ ‘Don’t you realize that if you don’t take care of this kid when they are 10 years old, you’ll take care of them when they are 20 and 100 instead? We just have to pay a little more taxes. It’s not going to kill us. You buy car insurance. Why not buy some democracy insurance?’ People think that Obama is this leftist, socialist guy,” he says. “But I don’t think they understand what people can go for when they are at the end of their line.” South Korean Youth Eschew Samsung Jobs For Facebook Dreams (Bloomberg) Not so long ago, South Korean students dreamed of lifetime jobs at Samsung Electronics Co. Now, many are shunning the juggernaut, intent on trying to emulate the likes of Facebook’s Mark Zuckerberg. Sim Cheol Hwan, 27, is typical of the trend. He wants to take a break from college in Seoul to set up a company rather than line up for job interviews at Asia’s biggest electronics company paying an average of 77.6 million won ($68,300) a year. So he’s set himself up in his own business making apps for Samsung and Apple phones. “I don’t want to get a job at a top 10 Korean company,” said the Hanyang University engineering student, who spent two years in the military. “Zuckerberg’s success proves that there is a lot of money to be made” in startups. Regulators Target Day-Trading Firm (WSJ) In the Romanian city of Cluj-Napoca, inside a garret up a narrow wooden staircase, four young men in T-shirts spend the day moving rapidly in and out of stocks, trying to ride their shifting momentum for profits. "It's very stressful," says one, dressed in a green T-shirt, blue shorts and Adidas sneakers. "The market is very hard to figure out." The four traders are part of a world-wide network initially set up by a Toronto-owned firm called Swift Trade Inc. Swift's founder, Peter Beck, turned it into one of the largest day-trading operations in the world over the past decade by aggressively expanding into far-flung locations, from China to Nicaragua to Romania, where he could recruit traders on the cheap. Mr. Beck also took an aggressive stance toward the law, say regulators in several countries where his firm has traded. The Financial Industry Regulatory Authority is expected on Tuesday to announce a settlement with Mr. Beck and an in-house brokerage unit for not establishing a supervisory system to prevent "a pattern of manipulative trading activity," according to a copy of the settlement reviewed by The Wall Street Journal. The Best CFOs: A Wall Street Journal Ranking (WSJ) #16: Ann Marie Petach, BlackRock. Chewbacca costume head from ‘Star Wars’ sold for $172K (NYDN) A Chewbacca headpiece used in the original "Star Wars" trilogy sold for a whopping $172,200 at a movie memorabilia auction this weekend. The loyal and lovable walking carpet swept the competition, which included an "Edward Scissorhands" costume worn by Johnny Depp that sold for $86,100 and an Everlasting Gobstopper used in the 1971 movie "Willy Wonka & The Chocolate Factory" that sold for $49,200. The Chewie mask was described by auctioneer Profiles in History as the "finest full costume headpiece of Chewbacca from the original trilogy in private hands," and "the finest screen-correct Chewbacca costume head from the Star Wars trilogy known to exist." The eyes are actual casts of Chewbacca actor Peter Mayhew's closed eyes, the auctioneer said. The expected price for the well-liked Wookie was between $60,000 and $80,000, plus fees and taxes, according to the auction catalog...Four years ago, someone spent a reported $240,000 to get the lightsaber prop used by actor Mark Hamill in the first two movies.

Opening Bell: 06.13.13

Nikkei Enters Bear Market (WSJ) Markets across Asia suffered another bruising day as investors scrambled for the exits, with Japanese stocks falling over 6% and into a bear market, and heavy losses in China and across Southeast Asia. Declines continued in U.S. stock futures and in Europe. ... The most dramatic move was in Japan, with the Nikkei Stock Average falling 6.4% to 12445.38 and putting it 21.9% down from the intraday peak reached on May 23, the day Japan's 6-month rally turned south and begun three weeks of wild trading. The big money bails on Argentina - again (Reuters) The mass exodus, which has been limited only by leftist President Cristina Fernandez's capital controls, is threatening to undermine Latin America's No. 3 economy even further by leaving it short of hard currency and new jobs. The underlying problems range from Fernandez's hostile treatment of the private sector, to severe financial distortions such as a parallel exchange rate, to the general feeling that Argentina is due for one of the periodic spasms that have racked the country every 10 years or so going back to the 1930s. EU Urges U.K. to Probe Currency Rigging in Libor’s Wake (Bloomberg) “They need to get to the bottom of it,” Sharon Bowles, 60, chairwoman of the European Parliament’s economic and monetary affairs committee and a member of the U.K. Liberal Democrat party, said in an interview. “It’s quite upsetting we have got another bad-news story. It’s time we managed to restore the reputation of our banks.” Singapore Regulator Said to Plan Bank Reprimand on Rates (Bloomberg) Singapore’s central bank plans to reprimand banks in the city-state as early as Friday following an 11-month review into how benchmark interest rates are set, five people with knowledge of the matter said. ... The monetary authority isn’t planning to impose criminal sanctions on the banks or any employees, said two of the people. MAS will probably require some of the banks to set aside funds as a deposit with the central bank for a period of time and strengthen their internal controls, two people said. U.K. Committee Says Google Avoids Tax (WSJ) Google Inc. has aggressively avoided paying corporation tax in Britain and its reputation won't be restored until it begins to pay what is due, a U.K. parliamentary committee said Thursday, in the latest sign that governments around the world are stepping up scrutiny of the tax affairs of multinational firms. In a strongly worded 64-page report, the public affairs committee also criticized the U.K. tax authority, Her Majesty's Revenue and Customs, for failing to challenge Google about its "highly contrived" tax arrangement and called on it to fully investigate the Internet giant. ... "It's clear from this report that the public accounts committee wants to see international companies paying more tax where their customers are located, but that's not how the rules operate today. We welcome the call to make the current system simpler and more transparent," the spokesman said. Soccer star Lionel Messi used the same trick as Apple to cut his tax bill (Qz) Lionel Messi, the Argentine soccer sensation who plays for FC Barcelona, has IP worth at least $21 million a year. That’s the value of his endorsement deals, led by his relationship with Adidas. And according to the Spanish government, he has dodged nearly €4.2 million ($5.5 million) in taxes by using that IP in a very Apple-like way. Spain accuses Messi and his father, who manages the player’s finances, of selling the rights to his brand image to shell companies in tax havens like Uruguay and Belize, and then licensing those rights to the companies and products he endorses. Such a move would shift Messi’s income from Spain, where he lives and pays taxes, to those lower-tax states. Girl group bases style on Nikkei ups and downs (Japan Times) “We base our costumes on the price of the Nikkei average of the day. For example, when the index falls below 10,000 points, we go on stage with really long skirts,” Mori explained. The higher stocks rise, the shorter their dresses get. With the Nikkei index ending above 13,000 [in late April], the four went without skirts altogether on the day of their interview with The Japan Times, instead wearing only lacy shorts. ... Machikado Keiki Japan (roughly translated as Economic Conditions on the Streets of Japan) released their debut single, “Abeno Mix,” on April 7. It pays homage to Abe’s ultraloose economic policies that have been dubbed “Abenomics” by the media. Debt Makes Comeback in Buyouts (WSJ) Shareholders in BMC Software Inc. will receive $6.9 billion to sell the corporate-software developer to a group of private-equity firms. But the buyers, led by Bain Capital LLC and Golden Gate Capital, only intend to pay $1.25 billion in cash out of their own pockets. The rest will come from debt raised by BMC to finance its takeover. The little-noticed acquisition is another milestone in the return of cheap debt and higher-risk deals to Wall Street: The cash put down by BMC's private-equity buyers is the lowest as a percentage of the purchase price of any buyout with loans exceeding $500 million since 2008, according to data-provider Thomson Reuters LPC. Apollo Tyres skids 24% on Cooper deal fears (FT) Shares in Apollo Tyres, India’s largest tyre company by sales, plunged by a quarter on Thursday amid investor concerns about higher debt related to the group’s planned $2.5bn acquisition of US-based Cooper Tire and Rubber. The all-cash deal, which would be the largest-ever Indian acquisition of a US company, is also set to increase Apollo’s consolidated net debt to equity ratio from 0.8 to around 3.8, according to Angel Broking, a Mumbai-based brokerage. “The deal will leave the company with a huge debt and that is the biggest concern,” said Yaresh Kothari, an automotive analyst at the broker. Shares in Apollo were down 24 per cent at Rs67 by 2pm in Mumbai on Thursday. The deal was announced after markets closed in Mumbai on Wednesday. Clearwire Endorses Dish’s Sweetened Bid (DealBook) Clearwire on Wednesday switched its allegiance to Dish Network, recommending that shareholders accept its bid of $4.40 a share over a rival offer from Sprint Nextel. Clearwire also postponed a shareholder vote from Thursday to June 24. Meanwhile, Dish extended its tender offer, which had been set to expire on Friday, to July 2. The change in recommendation is a setback for Sprint, which is seeking to buy the roughly 49 percent of Clearwire that it does not already own for about $3.40 a share. Its approach for Clearwire is meant to gain full control of an important affiliate whose wireless spectrum holdings are the cornerstone of a campaign to improve its network and make the company more competitive. Coty Raises About $1 Billion in Its Public Debut (DealBook) The company, whose products include Sally Hansen nail polish and perfumes endorsed by Beyoncé and Katy Perry, priced its initial public offering at $17.50 a share on Wednesday, in the middle of its expected range of $16.50 to $18.50. The stock sale values the company at about $6.7 billion. The offering, which raised just less than $1 billion in proceeds, is one of the three biggest initial offerings in the United States this year, according to data from Renaissance Capital. Washington pushed EU to dilute data protection (FT) The Obama administration successfully lobbied the European Commission to strip its data-privacy legislation of a measure that would have limited the ability of US intelligence agencies to spy on EU citizens, according to three senior EU officials. The measure – which was known within the EU as the “anti-Fisa clause”, after the Foreign Intelligence Surveillance Act that authorises the US government to eavesdrop on international phone calls and emails – would have nullified any US request for technology and telecoms companies to hand over data on EU citizens, according to documents obtained by the Financial Times. However, the safeguard was abandoned by commission officials in January 2012, despite the assertions of Viviane Reding, the EU’s top justice official, that the exemption would have stopped the kind of surveillance recently disclosed as part of the National Security Agency’s Prism programme. Miracle-Gro’s Potty-Mouthed CEO Should Have Known Better (Bloomberg) Responding to the use of rough language during World War II, Norman Vincent Peale, a minister (and author of “The Power of Positive Thinking”), lamented to the New York Times, “The public men of other years may have cussed plenty in private, but they had the good taste to keep it out of public address.” Public expletives have become more common, and executives have moved to leverage, or perhaps weaponize, foul language to their benefit. A San Francisco appeals court has ruled that a werewolf erotica novel must be returned to Andres Martinez, an inmate of Pelican Bay State Prison, after prison guards took it away from him on the grounds that it was pornography. Although the court grants that novel in question, The Silver Crown, by Mathilde Madden, is "less than Shakespearean," it argues that the book nevertheless has literary merit and shouldn't be banned under prison obscenity laws. The court also notes that "the sex appears to be between consenting adults. No minors are involved. No bestiality is portrayed (unless werewolves count)."

Opening Bell: 08.08.12

Standard Chartered Probe Said To Require Up To $700 Million (Bloomberg) Standard Chartered might be asked to pay as much as $700 million to resolve money laundering allegations filed by New York’s banking superintendant after his department grew impatient with inaction by federal regulators, a person familiar with the case said. Benjamin Lawsky, who heads up New York’s Department of Financial Services, tried unsuccessfully a few months ago to get U.S. regulators to punish the London-based bank for conduct involving disguised Iranian money transfers, said the person, who asked not to be identified because the matter is confidential. The transfers have been under investigation by federal agencies for more than two years, according to Lawsky’s Aug. 6 order. US Regulators Irate at NY Action Against Stanchart (Reuters) The U.S. Treasury Department and Federal Reserve were blindsided and angered by New York's banking regulator's decision to launch an explosive attack on Standard Chartered over $250 billion in alleged money laundering transactions tied to Iran, sources familiar with the situation said. ‘F-bomb’ banker fingered (NYP) The Standard Chartered Bank executive whose expletive-filled anti-US rant stands at the center of allegations that the bank improperly did business with Iran appears to be Richard Meddings. Meddings, 54, the Oxford-educated finance director at the UK bank, angrily dismissed concerns by his New York colleagues in 2006 that doing business with Iran’s despotic regime could sully the bank’s image, it is alleged. “You f—ing Americans,” Meddings shot back. “Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians?” The Department of Financial Services did not identify Meddings by name in its report — but disclosed the executive’s position, which Meddings occupied at the time. Standard declined to comment. Greece Credit-Rating Outlook Lowered By S&P As Economy Weakens (Bloomberg) The outlook on Greece’s CCC rating, already eight levels below investment grade, was revised to negative from stable, S&P said yesterday in a statement. The change reflects the risk of a downgrade if Greece is unable to obtain the next disbursement from the European Union and International Monetary Fund rescue package, the rating company said. The Bonds, They Are A-Changin' (WSJ) Bob Dylan's music was the soundtrack for the counterculture of 1960s America. Now it has become a selling point for an unusual bond offering being marketed to institutional investors and wealthy individuals. A privately held Nashville, Tenn., company is preparing a $300 million bond backed by the cut it receives as a middleman between music companies and songwriters and the outlets that broadcast their music. The company, Sesac Inc., has the exclusive rights to the public broadcast or performance of the music of Mr. Dylan, pop singer Neil Diamond, Canadian rock band Rush and jazz singer Cassandra Wilson. Woman in chase fled because she was topless, deputies say (TGS) Mandy Ramsey, 35, of Fort McCoy, was speeding south on County Road 318 in a Ford F-250 pickup truck when a patrol car chased after her to pull her over, according to a Marion County Sheriff's Office report. After seeing the patrol car in pursuit, the woman turned onto Northeast 220 Street and then continued down Northeast 10th Avenue, running a stop sign and eventually hitting an oak tree. The deputy lost Ramsey during the chase in the area, but soon found the truck parked behind a mobile home with its passenger side mirror broken with an oak tree leaf in it, according to reports. Deputies made contact with the vehicle's owner, Ramsey's boyfriend, who said he hadn't driven the truck in more than two hours. Ramsey then admitted to deputies that she didn't stop because she was driving topless and wanted to surprise her boyfriend. Rival Citadel Bid For Knight (WSJ) The offer, which was considered and discussed by Knight's board, was for a $500 million loan to Knight in exchange for a controlling stake in Knight's currencies trading platform Hotspot FX, plus a minority stake in the company of less than 20%, these people said. It followed an earlier offer on Friday, which Knight also reviewed, they said. The Citadel offer represented the potential for lesser dilution to existing Knight shareholders, by giving Citadel the right to as much as a 20% stake in the company, far less than the 73% stake anticipated in the investor group's deal, according to people familiar with the discussions. But Knight and its advisers believed there wasn't enough time to complete Citadel's deal, said people familiar with Knight's thinking. Further, they said, the Knight board and advisers viewed the Citadel terms as onerous for shareholders and the company, which not only would have had to repay the loan, but also surrender control of Hotspot, a "crown jewel" asset. The board also disagreed with Citadel's valuation of Hotspot, these people said. China Reforms Fail to End Stocks’ Bad Run (FT) When Guo Shuqing became China’s top securities regulator in October, investors hoped that he would bring a reformist zeal to the job that would help break the stock market’s two-year losing streak. They were right about the zeal but wrong about the impact on the market. Barely a week has gone by without the regulator announcing another new measure to improve the functioning of the country’s beleaguered market. But after a brief climb upwards, the benchmark Shanghai Composite Index is down nearly 13 percent since Mr. Guo took office. Deutsche Bank Is Stuck on RREEF (WSJ) Deutsche Bank on-and-off effort to sell its giant real-estate fund group is taking its toll on one of the world's largest property-investment businesses. Nine months after the bank first raised the possibility of selling the business known as RREEF, investors are still wondering about its future. The bank's lack of clear direction is putting its real-estate fund group at a competitive disadvantage, some investors and consultants say. Many pension funds have been shifting to safer property funds and looking for new managers, and they may be hesitant about putting their money with RREEF because of the uncertainty, they say. Deutsche Bank's new management team is nearing completion of a companywide strategic review. That includes RREEF, which has $56 billion under management and invests primarily in commercial real estate globally. It is considered one of the jewels of Deutsche Bank's broader asset-management business, which has about $694 billion. While it isn't clear what the review will mean for RREEF, some analysts speculate that all or some of the group may be back up for sale. But some within RREEF expect the bank to keep the business, according to people who have spoken with RREEF staff. Wendy's debuts Lobster and Caviar Burger in Japan for $16-$20 (NYDN) The Lobster and Caviar Burger has lobster chunks, lobster salad and caviar. The Surf and Turf Burger features lobster and red onion. The Ocean Premium Salad has lobster, caviar, avocado, vegetables and an egg...Each seafood addition will range from $16 to $20. The current Japan Premium lineup features the Porcini Grilled Chicken Sandwich and the Foie Gras Rossini. Wendy's left Japan in 2009 but started up again in late-2011, according to Burger Business. For its returned, Wendy's reassessed its game plan and decided to situate itself as classier fast food.

Opening Bell: 11.14.12

Austerity Strikes Sweep Across Europe (WSJ) Unions in Spain, Portugal and Greece went on strike Wednesday to protest government austerity plans amid a wide economic contraction across Europe's periphery, but questions remained about the unions' ability to influence economic policy. The general strike led to minor violent incidents in Spain, even though morning business activity seemed to remain relatively normal. Spain's government said 32 people had been arrested since midnight, and national TV showed small clashes with police, as well as rallies held by union members in transportation hubs like train and subway stations. The Spanish unions are protesting austerity cuts and an unemployment rate at 25% of the workforce. Geithner Warns Against Delaying Solution to US Fiscal Crisis (Reuters) With lawmakers and the White House bickering over how to put the country on a sustainable fiscal path, a number of lawmakers and think tanks have argued for more time. "That will leave all the uncertainty you don't like on the table," Geithner said at an event sponsored by the Wall Street Journal in his first public comments on the looming fiscal crisis since President Barack Obama won re-election last week. Facebook Investors Brace For Big Round Of Unlocked Shares (Bloomberg) Restrictions lift today on 804 million shares held by former employees and those who sold at the initial public offering, almost doubling the total available for trading, according to a regulatory filing. Geithner’s Money Fund Overhaul Push Sparks New Opposition (Bloomberg) Geithner, heading a Washington meeting of the Financial Stability Oversight Council, a group formed by the Dodd-Frank Act to address systemic financial risks, won unanimous approval for a draft recommendation to the SEC spelling out three ways to overhaul the $2.6 trillion industry. A new option would require capital buffers of as much as 3 percent of assets, while two other solutions he offered were opposed earlier by the fund industry and rejected in August by an SEC majority. Representatives for the fund industry, who last month put forth their own plan, immediately denounced the proposals as stale and unhelpful. While Geithner has said the SEC is best positioned to address money funds, he has also said that the regulators’ panel, often referred to as FSOC, might intervene and subject funds to oversight by the Federal Reserve if the SEC fails to act. SEC Expands Knight Probe (WSJ) The Securities and Exchange Commission has deepened its probe into whetherKnight Capital Group Inc. did enough to police its trading systems before computer errors nearly destroyed the brokerage. The inquiry, which began after Knight's errant Aug. 1 trades saddled it with more than $450 million in losses, initially focused more narrowly on what caused the errors. The probe has broadened to look further at the company's risk-control procedures and Knight's compliance with a rule implemented last year—called the market-access rule—that requires brokerages to guard against these sorts of problems, say people familiar with the investigation. Blankfein Warns Over Cuts (FT) The financial industry should not go “overboard” in cutting costs in reaction to current market conditions, the chief executive of Goldman Sachs said yesterday. “Our industry has a long history of letting too many people go at the bottom of the cycle and hiring too many at the top,” Mr. Blankfein told an industry conference in New York. Pepsi's New Fat Blocking Soda Unleashed On Japanese Consumers (Forbes) Up until recently, soda manufacturers have at least tacitly acknowledged that their carbonated swills aren’t healthy options. Up until recently. [Then] yesterday, Pepsi-Cola in Japan launched a fiber-infused iteration of its cola drink. According to Suntory, the sole distributor of Pepsi in Japan, the beverage contains “indigestible dextrin,” more commonly known as dietary fiber. This magic ingredient, Suntory’s website claims, helps reduce the amount of fat that’s absorbed into the body, hence the tagline of the new drink as a “fat-blocking soda.” Suntory also proffers that the drink quells the rise in triglycerides in the blood that normally follows a meal. Rochdale May Be At The End Of Its Rope (NYP) Stamford, Conn.-based Rochdale Securities is struggling to secure a deep-pocketed buyer three weeks after a former trader, identified as David Miller, saddled the firm with $1 billion in “unauthorized” Apple trades that it wasn’t able to cover. CEO Dan Crowley has been working around the clock to identify a “white knight” willing to save the 55-person broker dealer, according to sources. But staffers of the 37-year old firm worry ongoing investigations will turn off suitors and impede the firm’s ability to operate as a broker dealer. BNY Mellon Unit Settles Madoff Suits (WSJ) The Ivy Asset Management unit will pay $210 million to resolve a series of lawsuits claiming that it concealed doubts about the business operated by convicted Ponzi schemer Bernard L. Madoff. Shareholders To Citi: Break This Company Up (AP) Trillium Asset Management, a shareholder advisory firm with more than $1 billion in assets under management, effectively renewed call made recently by Sandy Weill, Citigroup’s former CEO and one of the founding fathers of the “financial supermarket” concept that helped turn Citi into a global banking behemoth. Siewert In Line For Goldman Partnership (NYP) Hired only last March, Richard “Jake” Siewert, the head of corporate communications, could be among the 70 or so new partners the 144-year-old bank is set to announce this morning...Siewert’s predecessor, Lucas Van Praag, made partner in 2006 — five years after joining the firm. Paula Broadwell Warned Gen. Allen Against "Seductress" Jill Kelley (CBS) A senior official has told CBS News correspondent David Martin the vast majority of the emails between Allen and Tampa socialite Jill Kelley were "completely innocuous," and the general believes many of the 20-30,000 pages under scrutiny are duplicates. The official said that in some of the emails, Kelley would say things like, "saw you on television and you were terrific," and Allen would write back with "thanks, sweetheart." The official said the two never discussed sex and that Allen had never been alone with Kelley. Nonetheless, CBS News correspondent Bob Orr says Pentagon and FBI sources describe the communications as "potentially inappropriate" and "flirtatious," and another source says they were likely more than just innocent exchanges -- noting that the Pentagon's Inspector General is involved for a reason. Among the hundreds of emails exchanged between Allen and Kelly - Orr reports that investigators are focusing on one from several months ago. In it, Allen told Kelley he'd just received an anonymous email warning him to stay away from her. Sources say that the anonymous email came from Broadwell, Petraeus' mistress, who allegedly warned Gen. Allen that Kelley was "a seductress." Broadwell allegedly sent similar warnings to other military officers at the U.S. Central Command, located near Kelley's Tampa home. Broadwell, who had been out of sight since the scandal emerged on Friday, was spotted Tuesday night preparing dinner and drinking a glass of wine inside her brother's Washington home.