Skip to main content

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.
  • Author:
  • Updated:
    Original:
Getty Images

Getty Images

Goldman is sued in U.S. over merger linked to Malaysia's 1MDB (Reuters)
Goldman Sachs Group Inc (GS.N) was sued on Tuesday by a major shareholder of a Malaysian bank it once advised, and which accused the Wall Street bank of fraudulently shortchanging it in a merger to curry favor with that country's prime minister. In a complaint filed with the New York State Supreme Court in Manhattan, Primus Pacific Partners said it was seeking $510 million of damages from Goldman and former Managing Director Tim Leissner, after the bank concealed its conflicts of interest with Prime Minister Najib Razak and Malaysia's 1MDB sovereign wealth fund. Goldman called the lawsuit "misguided" and said it would defend against it. A lawyer for Leissner did not immediately respond to requests for comment.

Disgraced Executive Waksal’s Startup Launches IPO (WSJ)
When Sam Waksal launched drug developer Kadmon Holdings LLC in 2010, many on Wall Street were wary of associating with a high-profile executive who had served five years in federal prison for insider trading and other crimes. But big-name investors who backed the firm—including Steven A. Cohen, Daniel Loeb and Ronald Burkle, investment banker Ken Moelis and GoldenTree Asset Management LP—could emerge winners on the heels of Kadmon’s initial public offering on Tuesday. The offering, which raised $75 million, comes in what has been a weak period for both biotech shares and IPOs, despite the Dow industrials and S&P 500 racing to record highs.

Third Point's first-half returns boosted by energy credit investments (Reuters)
Daniel Loeb's $16 billion Third Point LLC said on Tuesday that the firm's investments in energy credits drove positive returns during the first half of the year and is devoting over $1 billion to energy corporate credits. "We came into the year with a short credit portfolio that we reversed sharply in February, getting long over $1B in energy credit," Third Point said in its latest quarterly letter to clients. According to the letter, Third Point's Offshore Fund posted returns of 4.6 percent during the second quarter ended June 30, compared with the Standard & Poor's 500 which returned 2.5 percent.

Wall Street now substantially less certain of a Clinton victory (CNBC)
In the wake of the Republican National Convention and continued damage to Clinton's reputation from the email scandal, just 52 percent of respondents to the July CNBC Fed Survey now believe the Democratic nominee will prevail in November, a sharp drop from 80 percent in the April and June surveys. The survey of the 43 economists, fund managers and analysts, while not a scientific public opinion poll, mirror other polls showing a tighter race. Still, respondents see Donald Trump's victory as a long shot, with just 26 percent saying he is likely to win the White House. Instead, there was a large increase, to 21 percent from 5 percent in July, in the percent saying they don't know who will win in November.

Man leaves clothes in pub as he goes to get cash (Reuters)
A drinker who could not pay his bar bill left his clothes at the pub as collateral as he headed off naked to get cash, Czech police said. The man walked through the town of Prerov in the early afternoon on Monday dressed only in ankle-length black socks, talking on a mobile phone, security camera footage posted on news website www.idnes.cz showed. Police officers soon found the man who explained he had just popped across town to another pub to get some cash. He was allowed to complete his quest and eventually settled the bill, got his clothes back and put them on.

Facebook’s Answer to Silicon Valley Housing Crunch: Build Apartments (WSJ)
Fast-growing Facebook Inc. is in the midst of a push to expand its headquarters complex in its hometown of Menlo Park, Calif., a plan for 6,500 new employees that has rankled some locals frustrated with crowding. So in an effort to shore up city support, Facebook earlier this month made an unusual pledge for a tech company. It would build at least 1,500 units of housing, meant not specifically for Facebook employees, but for the general public. The novel move is a gesture intended to address a growing frustration in the region: too many workers, too few homes.

Apple's cash hoard shrinks for the first time in seven quarters (CNBC)
Apple's enormous cash pile shrunk for the first time in seven quarters. The Cupertino, California-based company said its cash pile shrunk to $231.5 billion in the fiscal third quarter, down $1.4 billion from the previous quarter.

Hedge funds begin to sue over Puerto Rico debt (NYP)
Since the beginning of the year, there have been at least seven lawsuits filed against Puerto Rico’s government by the island’s various creditors, according to a recent Bloomberg report. Of the lawsuits identified, two were filed within the last month by a consortium of hedge funds that includes Aurelius Capital Management, Autonomy Capital, and Monarch Alternative Capital. The hedge funds focused their claims on a portion of Puerto Rico’s $18.3 billion in outstanding general obligation and commonwealth-guaranteed bonds. Collectively, the bonds are secured by all available resources of Puerto Rico and the “good faith, credit, and taxing power” of the island.

Arizona Cops Hunt Walmart Theft Suspect Who Made His Getway On A Mobility Scooter (TSG)
Arizona cops are seeking the public’s help in identifying a thief who fled Walmart on a mobility scooter after pinning a worker to the wall during his escape. As seen in the store surveillance video, the suspect was confronted earlier this month by a female Walmart employee near the Tucson store’s exit as he sought to leave with unpaid items in his scooter’s front basket. After some evasive driving, the suspect ran into the Walmart worker, driving her backwards into a large blue bin. As two men came to aid the woman, the suspect drove out of the store on his gray ride.

Related

Opening Bell

Opening Bell: 11.08.12

On Wall Street, Time To Mend Fences With Obama (NYT) Few industries have made such a one-sided bet as Wall Street did in opposing President Obama and supporting his Republican rival. The top five sources of contributions to Mr. Romney, a former top private equity executive, were big banks like Goldman Sachs and JPMorgan Chase, according to the Center for Responsive Politics. Wealthy financiers — led by hedge fund investors — were the biggest group of givers to the main “super PAC” backing Mr. Romney, providing almost $33 million, and gave generously to outside groups in races around the country. On Wednesday, Dan Loeb, who had supported Mr. Obama in 2008, was sanguine. “You win some, you lose some,” he said in an interview. “We can all disagree. I have friends and we have spirited discussions. Sure, I am not getting invited to the White House anytime soon, but as citizens of the country we are all friendly.” [...] “Wall Street is now going to have to figure out how to make this relationship work,” said Glenn Schorr, an analyst who follows the big banks for the investment bank Nomura. “It’s not impossible, but it’s not the starting point they had hoped for.” Morgan Stanley Reassures Its Bankers (WSJ) The New York bank said Monday that investment-banking chief Paul Taubman would leave the firm at year-end. Mr. Taubman was passed over for a new job overseeing both the trading and investment-banking operations, people involved in the process said. The position went to Colm Kelleher, who has overseen sales and trading. To calm nerves and soothe egos among the firms' bankers, Morgan Stanley gathered its new team of investment-banking leaders in New York this week. Mr. Kelleher and one of his new banking lieutenants, Franck Petitgas, traveled from their London office, and Mr. Petitgas spent much of the week meeting with managers in the investment-banking division and senior bankers, people familiar with the discussions said. Top executives reassured senior bankers Monday that the investment-banking business was a priority for Morgan Stanley. In a memo to employees, Chief Executive James Gorman said Morgan Stanley would "continue to build on our leadership position in investment banking and capital markets." The messages came as some rank-and-file bankers at Morgan Stanley privately expressed surprise and dismay at the news from Mr. Taubman, who announced his departure to colleagues in an emotional meeting Monday with Messrs. Kelleher and Gorman in attendance. Some Morgan Stanley bankers said they worried that the new chiefs of investment banking didn't have the stature of Mr. Taubman, who spent a significant amount of time as a mergers banker and was known internally for his staunch support of the firm's investment-banking franchise. "People are upset," one senior person inside the company said. Wall Street Trades Foiled Romney Dreams For Bowles Hopes (Bloomberg) Wall Street executives who lost a bet that Republican Mitt Romney would defeat President Barack Obama are bracing for tougher regulation and hoping a deal can be struck with Congress to cut the deficit. Obama’s choice to succeed Treasury Secretary Timothy F. Geithner will be watched closely for signs about the administration’s approach to business and the deficit, industry executives said. Erskine Bowles, who served as chief of staff under former President Bill Clinton, would be a sign that Obama is willing to endorse a bipartisan debt-reduction plan supported by many business leaders, they said. “With the appointment of the Treasury secretary, Obama will be sending an important message to the public and to the foreign governments who own a lot of Treasuries,” Curtis Arledge, chief executive officer of Bank of New York Mellon Corp.’s investment-management arm, which oversees $1.4 trillion, told journalists in New York yesterday. “If he goes with somebody like Erskine Bowles, then the message will be that he cares about the deficit and is serious about cutting it.” Focus Shifts To Fiscal Cliff (WSJ) Barry Knapp, head of U.S. equity portfolio strategy at Barclays, turned more bearish after seeing the election results, arguing that the risk of fiscal-cliff disaster increased to more than half, from about 30% before. "When I look at what happened, I see a government that grew farther apart, which might be worse than the status quo," Mr. Knapp said. "The risk of going off the cliff has just gotten huge." Jobless Claims Fall (WSJ) Initial jobless claims, which are a measure of layoffs, decreased by 8,000 to a seasonally adjusted 355,000 in the week ended Nov. 3, the Labor Department said Thursday. Economists surveyed by Dow Jones Newswires expected 365,000 new applications for jobless benefits. Greek Jobless Rate Hits New High (WSJ) Elstat, the Greek statistical agency, Thursday said the seasonally adjusted rate of unemployment increased to 25.4% from 24.8% in July and 18.4% in August 2011. That was just below the 25.5% unemployment rate recorded by Spain in the same month, the highest in the European Union. Herd of elephants go on drunken rampage after mammoth booze up (Metro) The trunk and disorderly mammals ransacked a shop, three houses and ruined crops in the eastern village of Dumurkota, India. Police say the gang of over-the-limit tuskers downed more than 500litres of moonshine alcohol, managing to drink the place dry in a matter of minutes. The unruly mob demolished dozens of houses in their desperate hunt for more booze after hoovering up the hard stuff in record time. Local police officer Asish Samanat said the drunken elephants were more 'aggressive' than usual after their mammoth drinking session. 'Unfortunately these animals live in close proximity to man and they recognised the smell of the drink,' he explained. 'They were like any other drunk - aggressive and unreasonable but much, much bigger.' ECB Stands Ready to Buy Bonds as Economy Weakens (Bloomberg) “We are ready to undertake” Outright Monetary Transactions, “which will help to avoid extreme scenarios,” Draghi said today at a press conference in Frankfurt after policy makers left the benchmark interest rate at a historic low of 0.75 percent. “The risks surrounding the economic outlook remain on the downside” and underlying inflation pressures “should remain moderate,” he said. SocGen CEO Blames ‘Stupid’ Accounting for Profit Drop (CNBC) “Exceptional items are related in particular to this stupid accounting thing which means that when you have a credit that is improving, your CDS is going down and you have to recognise negative revenues,” Frederic Oudea told CNBC in Paris. SocGen’s third-quarter net profit was 85 million euros, down by 86 percent on the same period in 2011, after losses on asset sales. That was lower than analysts’ mean estimate of 139.1 million euros. Blackstone Leads Hedge Funds Attracting Bond-Rally Bears (Bloomberg) Funds that bet on both gains and losses in credit attracted $12.6 billion of deposits in the three months ended Sept. 30, the most since the period ended Dec. 31, 2007, according to HFR. Blackstone Group LP raised $4.05 billion during the period for its debt unit, which includes so-called long-short funds. Panning Capital Management, which was founded by Kieran Goodwin this year, started such a fund on Nov. 1 with $500 million. Two-Tier Global Housing Market Could Lead to Bubble: Goldman (CNBC) In a report titled: “Just don’t look down some house markets are flying again” Goldman argues easy money policies by the world’s major central banks has had a ripple effect on countries which have avoided the worst of the global financial crisis, boosting their house prices. According to Goldman, there now exist housing “high-flyers” - countries that have experienced real house price increases and “low-lyers” - countries where the housing market downturn appears to be more protracted. “High flyers” include Germany, Finland, Norway, France, Switzerland and Israel as well as Canada and Australia. The “low lyers” include the U.S., and the euro zone periphery of Spain, Greece, Italy and Ireland- but also those places where prices fell in the post-crisis period but have since stabilized such as the U.K., Japan and Denmark. Judge throws Dallas attorney back in jail after his Design District office trashed, vandalized with obscene drawings (DN) Attorney Tom Corea was charged earlier this year with four felonies alleging he stole from his clients. He was arrested, posted bond and was released. Weeks later, he was evicted for not paying rent for his upscale office in the 2000 block of Farrington Street near Interstate 35E and Market Center Boulevard, according to testimony before state District Judge Mike Snipes. Corea was ordered out by Oct. 31. When the president of the real estate company that represents the building, Doug Molny, showed up the next day to check out the property, he found “complete destruction,” including “penis graffiti on every single wall throughout the building,” Molny said. Written next to some of the penises was the name Doug. Molny said it appeared someone took a sledgehammer to granite counters. Additionally, doors, light fixtures, cabinets and appliances were destroyed or removed.

Third Point LLC
Opening Bell

Opening Bell: 6.26.17

Dan Loeb takes a bite out of Nestle; stress test results aren't as tidy as you think; Sports Illustrated stretches the definition of "swimsuit"; and more.

Opening Bell

Opening Bell: 10.15.15

Goldman misses; Citi beats; "Woman accused of taking clothes off, trashing Subway"; and more.

Goldman_Sachs-china
Opening Bell

Opening Bell: 11.6.17

Goldman goes east; Saudi prince's arrest impacts Citi, Twitter investments; Wilbur Ross has a Putin problem; William Dudley to retire; and more.

Opening Bell

Opening Bell: 10.25.12

Credit Suisse Profit Falls (Reuters) The Swiss bank said on Thursday third-quarter net profit fell 63 percent to 254 million francs, missing analysts' average forecast of 370 million. The quarter was hit by 1.05 billion francs in charges, mainly linked to its own debt. Brady Dougan: More Tough Times Ahead For Financials (CNBC) More aggressive cost cutting will be necessary in the coming years, Credit Suisse CEO Brady Dougan told CNBC Thursday, adding that he expects the financial services industry to continue to operate in a volatile market environment. The bank is targeting cost savings of a billion Swiss francs ($1.07 billion) by next year with further cuts in the years after that. “We believe we should be in mode of driving business more efficiently. We have cut 2 billion Swiss francs in the last year and we can take another billion in 2013 and [we have] set further targets for 2014 and 2015. We want to drive that efficiency and we are in a volatile revenue environment and that’ll be the case for the industry for some time,” Dougan said. CEOs Call For Deficit Action (WSJ) Chief executives of more than 80 big-name U.S. corporations, from Aetna to Weyerhaeuser Co. are banding together to pressure Congress to reduce the federal deficit with tax-revenue increases as well as spending cuts. The CEOs, in a statement to be released on Thursday, say any fiscal plan "that can succeed both financially and politically" has to limit the growth of health-care spending, make Social Security solvent and "include comprehensive and pro-growth tax reform, which broadens the base, lowers rates, raises revenues and reduces the deficit." The CEOs who signed the manifesto deem tax increases inevitable no matter which party succeeds at the polls in November. "There is no possible way; you can do the arithmetic a million different ways" to avoid raising taxes, said Mark Bertolini, CEO of Aetna. "You can't tax your way to fix this problem, and you can't cut entitlements enough to fix this problem." Crew Of Argentine Ship Seized By Hedge Fund Elliot Associates Returns Home (AP) They were supposed to sail the Argentine military's signature tall ship into the port of Buenos Aires in full glory after a goodwill tour asserting the South American country's place in the world. Instead, hundreds of sailors had to abandon their frigate, evacuated on orders from President Cristina Fernandez, after the ARA Libertad was detained by a Ghanaian judge in a debt dispute. Frustrated and disheartened but determined to go back as soon as possible to retrieve their three-masted ship, the sailors arrived home early Thursday on an Air France charter. The Argentine government couldn't send one of its own planes, for fear that it, too, could be seized as collateral. China Surpasses US as Top Foreign Investment Venue (Reuters) China overtook the U.S. as the world's top destination for foreign direct investment in the first half of 2012, according to the United Nations Conference on Trade and Development. China absorbed $59.1 billion in foreign direct investment (FDI) in the first six months, down slightly from $60.9 billion a year earlier, the agency said in a report. The United States attracted $57.4 billion in 2012's first half, down 39 percent from a year earlier, it said. Stephen Colbert Makes Donald Trump An Offer (Mediaite) Reality star Donald Trump yesterday offered to donate $5 million to a charity of Barack Obama‘s choosing if the President “opens up and gives his college records and applications, and if he gives his passport applications and records.” Stephen Colbert, touched by Trump’s generosity, made an offer of his own last night. He is vowing to pledge $1 million from his Super PAC to any charity Trump wants if: “…you let me dip my balls in your mouth.” Fed Steady On Policy (WSJ) The Fed expanded bond purchasing at its September meeting and plans to do its next major evaluation of its bond-buying programs at its final meeting of the year on Dec. 11-12. Policy makers are still gathering evidence on whether their programs are working. "The Committee remains concerned that, without sufficient policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions," the Federal Open Market Committee, the Fed's policy-making committee, said in a statement issued at the end of its two-day meeting. Jobless Claims Show Moderate Labor Progress (Bloomberg) Jobless claims decreased by 23,000 to 369,000 in the week ended Oct. 20 from a revised 392,000 the prior period, the Labor Department reported today in Washington. Lazard Profit Drops As Merger-Advisory Revenue Falls (Bloomberg) Lazard, the largest independent merger-advisory firm, posted a 33 percent drop in third-quarter profit as revenue from advising on mergers declined. The firm said it would implement a cost-cutting plan. Earnings fell to $35.4 million, or 26 cents a share, from $52.9 million, or 39 cents, a year earlier, the Hamilton, Bermuda-based firm said today in a statement. The average estimate of 11 analysts surveyed by Bloomberg was for per-share profit of 21 cents. Japanese man pays $780K for virginity of 20-year-old Brazil woman, who’ll use money for charity housing project (NYDN) A Brazilian student is set to sell her virginity for a staggering $780,000 after she put it up for auction online. A man called Natsu, from Japan, fended off strong competition from American bidders Jack Miller and Jack Right, and a big-spender from India, Rudra Chatterjee, to secure a date with 20-year-old Catarina Migliorini. The auction ended at 4 a.m. EST this morning, and the physical education student — who said she will use the cash to build homes for poverty-stricken families — was the subject of 15 bids. “The auction is just business, I'm a romantic girl at heart and believe in love. But this will make a big difference to my area,” she told Folha newspaper. “If you only do it once in your life then you are not a prostitute, just like if you take one amazing photograph it does not automatically make you a photographer.

Opening Bell

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

Opening Bell: 7.28.16

U.S. says fund lawyer holds 1MDB clues; Fed looks to December; Sword pulled in pizza roll dispute; and more.

KalanickUberTotalRecall
Opening Bell

Opening Bell 8.11.17

Uber board now trying to sue Travis Kalanick away; Wells Fargo board finally reshuffling; Venezuelan bonds are hot potatoes; Dan Loeb says something unfortunate; Fat monkey turns his life around; And more!