Opening Bell: 8.22.16

Banks race to meet $493 trillion swaps rules; Kobe Bryant unveils venture capital firm; Uber tells investors Lyft sucks; Anthony Weiner thinks The Post is trying to ‘catfish’ him; and more.
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Banks Sprint to Meet $493 Trillion Swaps Market Margin Rules (Bloomberg)
The world’s largest banks are racing to meet a U.S. and Japanese deadline next month when billions of dollars in new collateral requirements will begin to hit the over-the-counter derivatives market, even as new regulatory fault lines emerge.

Donald Trump the Mortgage Broker Was in Trouble From Moment One (Bloomberg)
As early as 2005, Trump was already brushing off concerns voiced by housing experts and economists that the real estate bubble could burst. That September, he wrote a blog post on the web site of the now-defunct Trump University that he titled “Doom and Gloom Don’t Pay.” “How you react to the so-called housing bubble can be a barometer of your business personality,” he wrote to students, who were offered seminars in the secrets of real estate investing. “Are you the type of person who takes advantage of positive situations when they present themselves, riding them out as long as they last? Or do you heed every message of doom and gloom, avoiding risks that could be some remarkable opportunities?”

Seller’s Paradise: Companies Build Bonds for European Central Bank to Buy (WSJ)
In two instances, the ECB has bought bonds directly from European companies through so-called private placements, in which debt is sold to a tight circle of buyers without the formality of a wider auction. It is a startling example of how banks and companies are quickly adapting to the extremes of monetary policy in what is an already unconventional age. In the past decade, wide-scale purchases of government bonds—a bid to lower the cost of borrowing in the economy and persuade investors to take more risk—have become commonplace. Central banks more recently have moved to negative interest rates, flipping on their head the ancient customs of money lending. Now, they are all but inviting private actors to concoct specific things for them to buy so they can continue pumping money into the financial system.

Kobe Bryant and Jeff Stibel Unveil $100 Million Venture Capital Fund (WSJ)
The retired NBA star will today unveil his venture-capital fund, a $100 million vehicle for investing in technology, media and data companies. Mr. Bryant, who turns 38 Tuesday, isn’t going it alone: He is partnering with 43-year-old Jeff Stibel, a longtime entrepreneur and investor who was introduced to Mr. Bryant by a mutual friend. They have named their firm Bryant Stibel and will be based in the Los Angeles area.

Doctors remove 40 knives from Indian man's stomach (UPI)
Surgeons have removed 40 metal knives from a patient who spent two months swallowing them, according to the doctor who led the operation. The unnamed 42-year-old man, who had an 'uncontrollable urge' to eat the knives, went to a hospital in Gurdaspur in Northern India after complaining of stomach pain and weakness. Only after a ultrasound revealed a large mass in his stomach, did the man tell doctors he had swallowed knives.

Uber Tells Investors It Wouldn’t Pay Above $2 Billion for Lyft (Bloomberg)
As Lyft Inc. was gauging interest from prospective acquirers, executives from Uber Technologies Inc. told investors in the past few weeks that the company wouldn't pay more than $2 billion to purchase its main U.S. ride-hailing competitor, said people familiar with the matter.

Pfizer to Buy Medivation for $14 Billion (WSJ)
The deal ends months of bidding for San Francisco’s Medivation, one of the most desired independent biotechs because it sells a leading prostate-cancer drug. Pfizer will pay $81.50 a share, a 21% premium to Medivation’s closing stock price Friday. Medivation shares traded up 20% to $80.58 as Pfizer shares fell 0.5% to $34.80 in premarket trading.

The Hunt Is On for a New Way to Measure the World's Economic Output (Bloomberg)
That search is binding such disparate endeavors as a stocks brokerage in Mumbai and a statistics conference in Dresden, Germany. The former, Ambit Capital, has created its own consumption index based on vehicle sales and electricity use as a hedge on India’s official growth numbers. That reflects a skepticism evident elsewhere that existing methods can’t consistently measure even traditional parts of the economy, and GDP is so subject to large revisions as to be of little use in making snap investment decisions.

Anthony Weiner thinks The Post is trying to ‘catfish’ him (NYP)
“Look, I am a target of a local newspaper here in New York,” the pervy pol said on Fernand Amandi’s radio show in Miami this week after Weiner was caught giving out his cellphone number to a guy posing as a female college student during a flirty, private online chat on an LA trip. “They got someone to get into a conversation with me online. I caught them at it, but they still had enough things to make a story out of it.” ... he told The Post when his latest text snafu came to light, “I can confirm that I am indeed deceptively strong like a mongoose,” and added his messages were just a “playful joust with an obvious catfish” — the term for a prankster who poses as another person online to romantically lure a target.

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Opening Bell: 09.11.12

Before Scandal, Class Over Control Of Libor (WSJ) At an April 25, 2008, meeting with officials at the Bank of England, Angela Knight, head of the British Bankers' Association, argued that the London interbank offered rate had become too big for her organization to manage, according to minutes of the meeting and a person who was there. Her suggestion went nowhere. Even as Libor's deep flaws became apparent, regulators resisted a greater oversight role, the BBA's member banks clung to control of Libor, and BBA executives bickered with one another over whether to hang onto the lucrative business, according to people who were involved and a Wall Street Journal review of hundreds of pages of emails, meeting minutes and other documents. Treasury Sells Big Chunk Of AIG Stock (WSJ) The Treasury sold about 554 million shares to the public at $32.50 apiece for a total of $18 billion in one of the biggest global follow-on stock offerings since the financial crisis. The offering was the Treasury's fifth sale of AIG stock since early last year and reduced the government's stake in the company to about 22% from 92% in early 2011. The price set Monday was above the government's cost basis of $28.73 a share, meaning taxpayers will earn a profit on the sale. New iPhone could boost U.S. GDP by up to 0.5 percent, JP Morgan says (Reuters) "Calculated using the so-called retail control method, sales of iPhone 5 could boost annualized GDP growth by $3.2 billion, or $12.8 billion at an annual rate," Feroli wrote. That 0.33 percentage-point boost, he added, "would limit the downside risk to our Q4 GDP growth protection, which remains 2.0 percent." Feroli laid out his math. J.P. Morgan's analysts expect Apple to sell around 8 million iPhone 5s in the fourth quarter. They expect the sales price to be about $600. With about $200 in discounted import component costs, the government can factor in $400 per phone into its measure of gross domestic product for the fourth quarter. Feroli said the estimate of between a quarter to a half point of annualized GDP "seems fairly large, and for that reason should be treated skeptically." But, he added, "we think the recent evidence is consistent with this projection." Geithner Holds His Own on Triathlon Front (Dealbook) Geithner participated in the 7th annual Nation’s Triathlon to Benefit the Leukemia & Lymphoma Society on Sunday, swimming, biking and running his way through the nation’s capital. The race involved a 1.5-kilometer swim in the Potomac River, a 40-kilometer bike ride through the city and a 10-kilometer run. And Mr. Geithner, 51, can boast of a pretty good finish to his race, completing the course in 2:33:07. He placed ninth in his division, men aged 50 to 54, according to the race’s Web site. Individually, he completed the swim in 29:10, the bike ride in 1:13:52 and the run in 45:51. New Yorker Cartoon Dept Temporarily Banned From Facebook For Violating ‘Nudity And Sex’ Standards (Mediaite) In a post entitled “Nipplegate,” the New Yorker‘s cartoon editor, Robert Mankoff, detailed how the magazine’s cartoon department became temporarily banned on Facebook: a particular Mick Stevens cartoon violated the social networking site’s community standards on “Nudity and Sex.” Stevens redrew the cartoon, he said, “but the gain in clothes caused too great a loss in humor.” He then noted that Facebook has different standards when it comes to males and females. As “the guidelines say, ‘male nipples are ok.’ It’s the ‘female nipple bulges’ that are the problem.” Big Banks Hide Risk Transforming Collateral for Traders (Bloomberg) JPMorgan and Bank of America are helping clients find an extra $2.6 trillion to back derivatives trades amid signs that a shortage of quality collateral will erode efforts to safeguard the financial system. Starting next year, new rules designed to prevent another meltdown will force traders to post U.S. Treasury bonds or other top-rated holdings to guarantee more of their bets. The change takes effect as the $10.8 trillion market for Treasuries is already stretched thin by banks rebuilding balance sheets and investors seeking safety, leaving fewer bonds available to backstop the $648 trillion derivatives market. The solution: At least seven banks plan to let customers swap lower-rated securities that don’t meet standards in return for a loan of Treasuries or similar holdings that do qualify, a process dubbed “collateral transformation.” That’s raising concerns among investors, bank executives and academics that measures intended to avert risk are hiding it instead. Soros: Germany going into depression in 6 months (MarketWatch) The recession in Europe will spread to Germany, the euro-zone's largest economy, within six months, said George Soros, chairman of Soros Fund Management. "The policy of fiscal retrenchment in the midst of rising unemployment is pro-cyclical and pushing Europe into a deeper and longer depression," Soros said in prepared remarks for a speech in Berlin Monday. "That is no longer a forecast; it is an observation. The German public doesn't yet feel it and doesn't quite believe it. But it is all too real in the periphery and it will reach Germany in the next six months or so." Lindsay Lohan encourages President Obama to slash taxes for 'Forbes millionaires' (DM) In a tweet fired off on Friday, the 26-year-old actress encouraged President Barack Obama to consider lowering taxes for the one-percenters listed on the Forbes Magazine’ millionaires’ list. Lohan, who has been very active on Twitter recently, was responding to a message posted by the Obama campaign following his Thursday speech at the Democratic National Convention. ‘I’ve cut taxes for those who need it: middle-class families, small businesses,’ the tweet read. About 10 minutes later, the star of the upcoming Elizabeth Taylor biopic ‘Liz and Dick’ put in her two cents on the issue of tax cuts: ‘We also need to cut them for those that are listed on Forbes as "millionaires" if they are not, you must consider that as well,’ her late-night message read. Gross Says Age of Credit Expansion Led Fund Returns Over (Bloomberg) Gross’s outlook follows his commentary last month, which sparked debate among investors and analysts after he declared that the “cult of equity” was dying. In his August comments, he compared long-term returns from equities to a “Ponzi scheme” and said returns of 6.6 percent above inflation, known as the Siegel Constant, won’t be seen again. “Our credit-based financial system is burdened by excessive fat and interest rates that are too low,” Gross wrote. “Central banks are agog in disbelief that the endless stream of” liquidity pumped into the banking sector has not stimulated lending, Gross wrote. Queen's Corgi Buried At Balmor (TDB) The dog, Monty was involved in a fight recently when he was one of a number of dogs which attacked Princess Beatrice's terrier Max over the summer, but it appears the fight - Max came off worst and nearly lost an ear in the fracas - was not a contributory cause of death. Buckingham Palace is not officially revealing how or when the corgi, named Monty (after the American horse whisperer Monty Roberts who has advised the queen on dogs and horses) met his end, but palace sources told the Royalist the animal passed away of old age over the summer. The animal died at the Royal Scottish residence of Balmoral, where, in accordance with tradition, he has been buried in the Royal pet cemetery opened by Queen Victoria when her beloved Collie, Noble, died there in 1887...the Queen is known to take the deaths of her pets hard: Lady Pamela Hicks, the mother of India Hicks once wrote a note when one of the Queen’s corgis died and received a six-page letter back.

Opening Bell: 2.19.15

Germany tells Greece to fuck itself; Morgan Stanley wondering if junior employee didn't really post client info online; HFT firm will IPO; "Skijoring event combines skiing with horse racing"; When the hackers come back, JP Morgan will be ready.

Opening Bell: 02.12.13

Obama Address to Focus on Economy, Social Issues (WSJ) President Obama's chief spokesman, Jay Carney, said Monday the core emphasis in the president's big speeches remains the same: "The need to make the economy work for the middle class, because the middle class is the engine that drives this country forward and which will, if it's given the right tools and the right opportunities, will drive us forward in the 21st century." Republicans welcome the president's expected focus on the economy, but also say he hasn't done enough. "The White House says they're talking about jobs and the economy. I welcome that engagement," House Majority Leader Eric Cantor (R., Va.) said in an interview Sunday. "It seems as if the president is constantly trying to pivot back to jobs and the economy. The reason you see that happening is he's never pursued it." Mr. Obama will also address a series of automatic spending cuts set to kick in March 1—the so-called sequester—which could threaten economic growth, national—security preparation and the jobs of thousands of federal employees. Mr. Obama has called on Congress to pass a temporary measure of spending reductions and new taxes to replace the across-the-board cuts. Barclays to Cut 3,700 Jobs After Full-Year Loss (Bloomberg) Barclays Plc will cut 3,700 jobs to reduce annual costs by 1.7 billion pounds ($2.6 billion) as Chief Executive Officer Antony Jenkins revamps the lender following its first full-year loss in two decades. About 1,800 positions will go this year at the firm’s investment bank and 1,900 in its loss-making European consumer and business banking unit, Jenkins said in a statement today. The lender posted a net loss of 1.04 billion pounds for 2012, wider than the 307 million-pound estimate of nine analysts surveyed by Bloomberg, as it set aside an additional 1 billion pounds in the fourth quarter for compensating clients wrongly sold interest-rate swaps and loan-repayment insurance. BNY Mellon loses U.S. tax case, to take $850 million profit hit (Reuters) BNY Mellon Corp said on Monday it will take an $850 million charge against first-quarter profit after losing a high-stakes tax case to the U.S. Internal Revenue Service, a move that will also erode some of its capital. The BNY Mellon case was the first to go to trial since the IRS accused several U.S. banks of generating artificial foreign tax credits through loans with London-based Barclays. The IRS challenged a $900 million tax benefit claimed by BNY Mellon that stemmed from a $1.5 billion loan from Barclays. The funding was so cheap that at one point Barclays actually paid BNY Mellon to take Barclays' money, according to court papers. Nasdaq Steps Up Pursuit Of A Partner (WSJ) Nasdaq, long on the hunt for a partner, has ramped up its conversations about strategic options ranging from joint ventures to a sale, according to people familiar with the talks, as rival NYSE Euronext moves ahead with a merger that will form an even-bigger competitor. Twinkie Brand Heads For Sale (WSJ) Judge Robert Drain of the U.S. Bankruptcy Court in White Plains, N.Y., cleared Hostess on Monday to proceed with several of the sale processes it has unveiled during the past several weeks. Private-equity firms Apollo Global Management LLC and Metropoulos & Co. are now officially set to kick off the contest for most of the Hostess cakes business, with a $410 million offer for brands such as Twinkie, Dolly Madison, Ho Hos and Ding Dongs. That so-called "stalking horse," or lead, bid also covers five bakeries and certain equipment. McKee Foods Corp., the maker of Little Debbie snack cakes, is the stalking-horse bidder for Hostess's Drake's brand. The $27.5 million offer from McKee, based in Collegedale, Tenn., doesn't include the Drake's plant in New Jersey. Tesla CEO Clashes With New York Times Over Model S Review (Bloomberg) Elon Musk, the billionaire chief executive officer of Tesla Motors Inc. said a range test of the Model S electric sedan by the New York Times was “fake” as the reporter didn’t disclose all the details of his drive. “NYTimes article about Tesla range in cold is fake,” Musk said in a Twitter post yesterday. “Vehicle logs tell true story that he didn’t actually charge to max & took a long detour.” The Times on Feb. 8 published a story by John M. Broder on its website detailing how the Model S he drove failed to meet the electric sedan’s 300-mile (483-kilometer) range “under ideal conditions” while driving in temperatures as low as 10 degrees Fahrenheit (minus-12 Celsius). The Times also published a blog post by Broder about the test-drive on the same day, detailing his plan to use Tesla’s new “supercharger” stations. Broder followed instructions he was given in “multiple conversations with Tesla personnel,” Eileen Murphy, a spokeswoman for the Times, said in an e-mail message. The story was “completely factual, describing the trip in detail exactly as it occurred,” Murphy said. “Any suggestion that the account was ‘fake’ is, of course, flatly untrue.” Dispute over mashed potatoes turns dangerous (TBN) A disagreement over mashed potatoes turned dangerous over the weekend when a victim said tempers escalated and a woman came at her with box cutters. Shaquina S. Hill, 23, of Fourth Street was charged with second-degree menacing and second-degree harassment as a result, city police said. An 18-year-old woman told police she and Hill argued about mashed potatoes just before 9 p.m. Sunday at a Fourth Street address, and things escalated from there. The younger woman told police Hill grabbed box cutters and waved them at her, then dropped the knife and started throwing things at her, including a heavy ceramic vase and coffee table. She told police Hill also punched her in the chest. U.K. Regulator to Investigate Autonomy (WSJ) The Financial Reporting Council, the regulator tasked with promoting good corporate governance and financial reporting in the U.K., announced the investigation Monday on its website. It said the probe will look at Autonomy accounts published between Jan. 1, 2009, and June 30, 2011. New York fund manager arrested on Ponzi scheme charges (Reuters) Federal prosecutors charged Jason Konior, 39, with defrauding investors by promising to match their investments in his fund, Absolute Fund LP, many times over. Prosecutors said he used $2 million of the money he collected from three hedge funds to pay his own expenses and cover redemption requests from prior investors, according to the criminal complaint dated February 7. Treasury’s Brainard Says G-20 Must Refrain From Devaluation (Bloomberg) “The G-20 needs to deliver on the commitment to move to market-determined exchange rates and refrain from competitive devaluation,” Lael Brainard, the Treasury’s undersecretary for international affairs, said at a news conference in Washington today. Brainard said “global growth is weak and vulnerable to the downside,” and strengthening demand must be a top priority for G-20 finance ministers and central bankers meeting in Moscow Feb. 15-16. Ex-Fund Manager Avoids Jail Time (WSJ) The cooperation of Ali Far, co-founder of Spherix Capital LLC, led to the convictions of at least five people, including Galleon Group founder Raj Rajaratnam, prosecutors said. Mr. Rajaratnam, who was convicted on conspiracy and securities-fraud charges, is serving an 11-year prison sentence, one of the longest terms ever imposed for insider trading. Mr. Far secretly agreed to cooperate with the government's probe shortly after he was approached by federal agents in April 2009, prosecutors said. Mr. Far, a former Galleon employee, recorded about 244 calls, including calls with Mr. Rajaratnam, prosecutors said. He also was prepared to testify at Mr. Rajaratnam's trial as a government witness in 2011 but was never called, they said. "I am truly sorry for my mistakes and I am ashamed," Mr. Far said at a hearing in Manhattan federal court Monday. U.S. District Judge Robert Patterson sentenced Mr. Far to one year's probation. He also imposed a $100,000 fine. The Perils of Being A Dog Show Judge (WSJ) Cindy Vogels had a litter of options for Best in Show at last year's Westminster Kennel Club Dog Show. As the final judge, she could have chosen a German Shepherd, a Doberman pinscher or even a Dalmatian. Instead she picked a Pekingese named Malachy—and everyone else judged her. One person, Vogels said, called the Pekingese "that awful dog." Vogels recalled another saying: "Why would you give Best in Show to the dog that couldn't walk?" "The American public was horrified," Vogels said. "The public has no appreciation for a Pekingese." It is the ultimate honor for a show judge to name the Best in Show winner at Westminster, the year's glitziest dog show, which concludes Tuesday at Madison Square Garden. But it also can bring out the worst in people. The math behind this logic is basic: There are 187 breeds, only seven will win their groups and just one will win the opinion of Michael Dougherty, the Best in Show judge on Tuesday. "You go in there alone," said Elliott Weiss, the 2010 Best in Show judge, "and you come out alone."

Opening Bell: 01.24.13

Witness Adds Thread To SAC Probe (WSJ) A government informant has implicated a prominent former trader at SAC Capital Advisors, telling federal investigators the two swapped confidential stock tips for years, according to people briefed on the matter. The connection between ex-SAC portfolio manager Dipak Patel and the undercover mole, a California-based former portfolio manager at an investment fund, hasn't previously been disclosed. Mr. Patel and his lawyer didn't respond to requests for comment...Mr. Patel, who hasn't been charged with any wrongdoing, was a technology-stock manager who worked under Mr. Cohen for years before leaving in 2010. Obama To Name White As SEC Chief (WSJ) President Barack Obama on Thursday will name Mary Jo White, a former star prosecutor who pursued terrorists and mobsters in New York, to lead the Securities and Exchange Commission, a White House official said. Barclays CEO Says Bank Was Too Aggressive, Too Self-Serving (CNBC) The bank which paid a fine of 290 million pounds for manipulating Libor and was caught up in the payment protection insurance scandal, has been trying to turn a new leaf. Jenkins, who took over as CEO in August, said the company was addressing its past mistakes. "We were too aggressive, we were too short-term focused and too self-serving," Jenkins told CNBC at the World Economic Forum in Davos. "The industry, and Barclays, got it wrong on occasions," he added. Merkel Says Europe Must Persist With Reforms (CNBC) German Chancellor Angela Merkel urged European nations to continue the economic reforms they have begun and argued that the debt crisis offered an opportunity for the bloc to become more competitive. "The political experience is that often you need pressure for political structural reforms," she told delegates at the World Economic Forum in Davos, Switzerland. "If Europe is in a difficult situation today we need to implement structural reforms now so that we may live better tomorrow," she said. Knight Capital's Profit Slides 84% (WSJ) Profit in the quarter to Dec. 31 fell to $6.5 million from $40.2 million a year earlier, with per-share earnings sliding to a penny from 43 cents, below the three-cent consensus among analysts polled by Thomson Reuters. Revenue fell 16% to $287.7 million. Jobless Claims Fall To 5-Year Low (WSJ) Initial jobless claims, a measure of layoffs, fell by 5,000 to a seasonally adjusted 330,000 in the week ended Jan. 19, the Labor Department said Thursday. Economists surveyed by Dow Jones Newswires expected 360,000 new applications for jobless benefits last week. Two men charged with robbery, assault and battery after stealing $400 from Girl Scouts selling cookies (NYDN) Two men are being held on charges they stole nearly $400 from a group of Girl Scouts selling cookies at a store in Massachussetts. An adult supervising the Scouts suffered a broken nose and arm injuries trying to stop the men. Authorities say 22-year-old Nicholas Taverna of Greenfield and 25-year-old Cassidy Michalski of Deerfield were held on $5,000 bail each at their arraignment Tuesday on charges of unarmed robbery, assault and battery with a dangerous weapon and shoplifting. Police say the suspects stole two cellphones from the Walmart in Northampton on Saturday and tried to trade them for drugs in Holyoke. When that failed, they returned to Northampton where they had seen the 11- and 12-year-old Scouts earlier, and stole their cash box. US Lawmaker Set to Unveil Financial Revamp (Reuters) The proposal, expected as early as this week, will come from House Ways and Means Committee Chairman Dave Camp, whose panel has been exploring a broad tax code overhaul for more than a year. Camp wants to slash the top corporate tax rate to 25 percent from 35 percent and simplify the code.Critics of the current corporate tax system note that the United States has one of the steepest corporate tax rates in the world. Commerzbank to Cut 6,000 Jobs (WSJ) The cuts, representing up to 12% of the bank's 49,215 full-time staff, will affect all group levels and units, in Germany and abroad, although online bank Comdirect AG and Polish unit BRE Bank will be excluded, according to an internal memo to staff. Japan Posts Record Trade Deficit (WSJ) Japan's trade deficit nearly tripled to a record ¥6.927 trillion ($78.3 billion) last year and few expect a drastic improvement anytime soon, leaving Tokyo no choice but to carry on with efforts to boost the economy. Citigroup’s Corbat Says Environment to Stay ‘Challenging’ (Bloomberg) “People recognize the times we are in, these are challenging times,” Corbat, 52, said in an interview with with Bloomberg Television’s Erik Schatzker at the World Economic Forum in Davos today. “Things will remain challenging going forward for a period of time. Our people recognize that.” Corbat replaced the ousted Vikram Pandit as CEO at the third-biggest U.S. bank in October. He has since announced plans to fire about 11,000 employees and pull back from certain markets as he seeks to cut Citigroup’s costs and boost rewards for shareholders. Profit at the lender’s ongoing businesses slid 8 percent last year while costs rose. Citigroup cut investment bankers’ bonuses by 10 percent to 20 percent globally after a revenue slump, people with knowledge of the matter said last week. Corbat said the firm can still be “absolutely competitive,” on banker pay. “I think morale is good,” he said, without saying whether the company plans to cut more jobs. “Our employees are very confident around the strategy if you think about what’s going on in the world today.” N.J. men sue Subway, claim they've been shorted on footlong sandwiches (AP) The suit, filed Tuesday in Superior Court in Mount Holly, may be the first legal filing aimed at the sandwich shops after an embarrassment went viral last week when someone posted a photo of a footlong and a ruler on the company's Facebook page to show that the sandwich was not as long as advertised. At the time, the company issued a statement saying that the sandwich length can vary a bit when franchises do not bake to the exact corporate standards. Stephen DeNittis, the lawyer for the plaintiffs in the New Jersey suit, said he's seeking class-action status and is also preparing to file a similar suit in Pennsylvania state court in Philadelphia. He said he's had sandwiches from 17 shops measured — and every one came up short. "The case is about holding companies to deliver what they've promised," he said.

Opening Bell: 06.20.12

Dimon Receives Tougher Treatment (WSJ) The lectures appeared to rankle Mr. Dimon. Certain questions received sharp, defiant retorts. "We lost $2 billion to Chrysler. I assume you'd want us to continue to lend to Chrysler," Mr. Dimon shot back when Rep. Gary Ackerman suggested the bank's hedging amounted to gambling. "We don't gamble," Mr. Dimon said curtly. "We do make mistakes." Dimon gets grief from pols — and cleaning lady (NYP) After taking his lumps during his second grilling on Capitol Hill over the bank’s $2 billion trading blunder, he was confronted by Adriana Vasquez, a 38-year-old janitor who says she earns $10,000 a year cleaning JPMorgan’s tower in Houston. “Despite making billions last year, why do you deny the people cleaning your buildings a living wage?” Vasquez asked the bank chieftain at the end of his two-hour grilling before the House Financial Services Committee. As a member of the Service Employees International Union, Vasquez, who says she cleans 24 bathrooms on 11 floors of the bank building, is putting pressure on JPMorgan. The union put out a press release in advance of the hearing, announcing that it would send Vasquez to confront Dimon over the issue of janitorial pay. A JPMorgan spokeswoman told The Post that the bank is a tenant of the tower but doesn’t set pay for the janitors, who are hired by the building’s management. Dimon, who was expecting to hear from the union, told Vasquez to call his office. BOE Seen Likely To Increase Stimulus (WSJ) The Bank of England looks set to pump more stimulus into the U.K. economy after minutes of its June policy meeting revealed that Governor Mervyn King was narrowly defeated in a knife-edge vote on a fresh bout of bond purchases. Moody's Upgrades Turkey (WSJ) Moody's said the move, which raised Turkey's sovereign-debt rating by one notch to Ba1—just below investment grade—was driven by the fast-growing economy's improvements in its public finances and the shock-absorption capacity of the government's balance sheet. UK Reveals New 'Say On Pay' Laws (WSJ) The British government unveiled legislation Wednesday to give investors more say on the pay packages of senior corporate executives, a key milestone in a shareholder rebellion that has been rippling through the U.K. in recent months. The measures include giving shareholders a binding vote on how much directors are paid and increasing transparency by requiring companies to annually publish a simple figure totaling how much directors received. Falcone’s Harbinger Capital Turns To Dell’s MSD For Loan (Bloomberg) Philip Falcone’s hedge fund, having taken out a loan earlier this year at an effective annual interest rate of 24 percent, has found a new source of financing: the money-management arm of billionaire Michael Dell. Harbinger Capital Partners Master Fund I Ltd. entered into a note purchase agreement on June 14 with a credit fund run by MSDC Management LP, according to a June 18 regulatory filing. MSDC Management is an investment adviser backed by MSD Capital LP, the private investment firm for Dell and his family. Under the financing agreement, the MSD credit fund can swap as much as $50 million of loans extended to Falcone’s Harbinger Capital for part of its stake in Harbinger Group, his publicly traded investment vehicle. Honeybee Swarms Increase In NYC After Mild Spring (NYT) When Happy Miller, the Seaport restaurant manager, saw tourists flailing their arms in a cloud of airborne black specks late last month, he closed the glass door and quietly panicked. “Oh my God, what do I do?” he thought before calling 311, security guards and local news outfits. The television trucks, he said, were first to arrive. It took several hours before Officer Anthony Planakis, the New York Police Department’s unofficial beekeeper in residence, arrived with a metal swarm box and a vacuum to collect the 17,500 or so homeless creatures. Officer Planakis, who has been responding to swarm calls since 1995, said this had been New York’s busiest year of swarming he had ever experienced. Since mid-March, he said, he has tended to 31 jobs in the five boroughs, more than twice the number he handled last season, which is normally mid-April through July. “It’s been pretty hectic,” he said, adding that this week’s warmer temperatures could encourage more bees to take off. Fed Seen Extending Operation Twist And Avoiding Bond Buys (Bloomberg) The Federal Reserve will probably decide today to expand Operation Twist beyond $400 billion to spur growth and buy protection against a deeper crisis in Europe, according to a Bloomberg News survey of economists. Fifty-eight percent of respondents in a June 18 poll said the Fed will prolong the program, which seeks to lower borrowing costs by extending the average maturity of the securities in the central bank’s portfolio. The current program ends this month. US Watchdog Hits At 'Risky' London (FT) US lawmakers and regulators have attacked London as a source of financial crises and promised tougher crossborder rules in the wake of $2 billion of trading losses at the UK unit of JPMorgan Chase. Gary Gensler, chairman of the Commodity Futures Trading Commission, said on Tuesday at a congressional hearing into JPMorgan’s trading losses that the US was vulnerable to risky activity in London. He said AIG had been hit by its financial products unit in London while Citigroup had been harmed by special purpose investment vehicles set up in the UK capital. “So often it comes right back here, crashing to our shores...if the American taxpayer bails out JPMorgan, they’d be bailing out that London entity as well,” he told the House financial services committee. Hedge Funds Hurt In May Commodity Rout As Brevan Drops (Bloomberg) Funds tracked by the Newedge Commodity Trading Index lost an average 3 percent last month, the most since September. Taylor Woods Master Fund Ltd., managing more than $1 billion, retreated 4.2 percent, according to a monthly report obtained by Bloomberg News. Galena Asset Management Ltd.’s metals fund dropped 2.6 percent in May, according to the company, and Brevan Howard Commodities Strategies Master Fund Ltd. fell 2 percent, according to a monthly report to investors obtained by Bloomberg. Ken Starr's pole dancing ex shops book (NYP) ...Passage also describes how another A-list actor and his wife took her and a “massage girl” into a room at Scores. But the couple ignored the hot ladies and started “having sex right in front of us.” After an hour of the sex show, Passage says she “reached into [the star’s] pants pocket...and told him I was taking an extra $200 as a tip...He was clearly too busy to negotiate, so he just waved me off and said, ‘ Thanks.’ ”

Opening Bell: 06.12.13

Pimco Sees 60% Chance of Global Recession in Five Years (Bloomberg) Pacific Investment Management Co., the world’s largest active bond manager, said investors should cut risk amid a more than 60 percent chance of a global recession in the next three to five years. Global growth will slow, keeping inflation in check, and “economic volatility” will increase, Saumil Parikh, a portfolio manager at Newport Beach, California-based Pimco, said in a report being posted on the firm’s website today. Investors shouldn’t add risk in the search for yield, he said. “The global economy experiences a recession every six years or so, and the frequency of global recessions tends to increase when global indebtedness is high and falling as opposed to when indebtedness is low and rising,” Parikh, who focuses on asset allocation, multisector fixed income and absolute-return portfolios, said in the report. The last global recession was four years ago, he said. Banks Get Reprieve on New Swaps Rule (WSJ) Some of biggest banks on Wall Street will get an additional two years to comply with a post-financial crisis rule requiring they move risky swap activities into separate affiliates. The Office of the Comptroller of the Currency said it granted extensions to seven banks, giving them until July 2015 to comply with so-called "swaps push-out" rules required by the 2010 Dodd-Frank law. ... The OCC notified Bank of America Corp., J.P. Morgan Chase & Co., Citigroup Inc., Wells Fargo & Co., HSBC Holdings PLC, Morgan Stanley and U.S. Bancorp that they were granted a 24-month extension in response to their requests for a longer transition period. The move comes less than a week after the Federal Reserve said foreign banks also will be eligible for the two-year delay in complying with the rule, which is slated to take effect July 16. Emerging market assets suffer in fierce sell-off (FT) Emerging economies have been among the prime beneficiaries of ultra-loose global monetary policy as central banks led by the Fed have flooded financial markets with more than $12tn of extra liquidity since the financial crisis. But signs of an economic slowdown spreading from China and indications that the Fed could reduce the pace of its $85bn-a-month bond purchases have triggered a sharp correction in emerging markets. The South African rand and the Brazilian real touched four-year lows against the US dollar on Tuesday, and the Indian rupee fell to a record low. Even relatively robust countries like the Philippines and Mexico – long favourites of investors – have been hit by a spate of selling. Some central banks have begun to intervene to stem the currency slides. Is U.S. stock trading safer? Fewer erroneous trades seen (Reuters) More than three years after the "flash crash" terrified many by temporarily wiping out almost $1 trillion of U.S. stock market value in a few minutes, there are signs that the number of erroneous and aberrant trades is dropping. The use of circuit breakers for individual securities in the wake of the May 6, 2010 plunge, and the introduction of tougher risk-management controls for broker-dealers in November 2010 appear to have helped stabilize trading, market experts and regulators said. The Financial Industry Regulatory Authority, the security industry's watchdog, said the number of reports of "clearly erroneous" trades it received was down 84 percent in the last six months of 2012 compared with the first six months of 2009. Facebook Investors Press Zuckerberg on Stock Price at Annual Meeting (CNBC) Facebook CEO Mark Zuckerberg tried to tackle concerns about its stock head-on at the first annual shareholder meeting Tuesday, but investors pressed for answers about why the price is still down a year after the company went public. "The answer is we understand that a lot of people are disappointed with the performance of the stock, and we really are, too," Zuckerberg said in his opening remarks before taking questions. ... The stock, priced at $38 when the company went public in May 2012, hit $17 a few months ago and was trading at about $24 in afternoon trading Friday. Facebook can't control the stock price but is focused on developing the best products to create more shareholder value, Zuckerberg said. NJ Mayor Apologizes for Calling Residents "Annoying" (NBC) The mayor of Toms River apologized Tuesday night for comments he made about an area battered by Sandy, but not all residents were satisfied. Last week, Mayor Thomas Kelaher told Bloomberg News that he thought residents of Ortley Beach, where many are still without homes, were "annoying." "I certainly never intended to be disrespectful to the people who live in Ortley beach," Kelaher said at a meeting Tuesday. Marketfield Poet-Philosopher Pair Bet Europe for Top Fund (Bloomberg) Michael Aronstein, a poet, and Michael Shaoul, a doctor of philosophy, have made their MainStay Marketfield Fund the world’s fastest-growing by anticipating recoveries in the most-hated assets. Marketfield grew more than five-fold to $9.5 billion in the past year, the biggest increase of a fund with more than $5 billion in assets, after betting on a rebound in U.S. housing stocks and European shares. Now, their success relies on Irish and Italian stocks rallying and equities in China , Brazil and India tumbling. The New York-based fund has advanced 70 percent since July 2007, more than triple the return of the Standard & Poor’s 500 Index, data compiled by Bloomberg show. “I don’t know where the level is,” Aronstein, a former Merrill Lynch strategist who writes poetry in his spare time, said of the potential for further declines in developing nations’ stocks in an interview April 4. “But if we are right, it’s going to get to the point where people cannot stand it anymore.” Metacapital in Worst Slide as Bloodbath Roils Funds (Bloomberg) Deepak Narula rose to fame as manager of the best-performing hedge fund last year by navigating the government’s stimulus efforts. He’s having a far harder time as the Federal Reserve moves closer to an exit. Metacapital Management LP’s flagship $1.5 billion fund lost an estimated 6.4 percent last month, the worst decline since it started in 2008, according to a letter to investors obtained by Bloomberg News. That followed drops of 0.5 percent in April and 0.1 percent in March, after 17 months of consecutive gains including a 41 percent return last year. ... “It’s been a bloodbath the last four to six weeks,” said Troy Gayeski, a senior portfolio manager who helps invest client money in hedge funds at SkyBridge Capital, which manages about $7.7 billion. “It was a confluence of just about everything” from investors’ concerns that refinancing would pick up among some borrowers who’ve had trouble qualifying to the slump in the mortgage debt that the Fed is buying, he said. SoftBank's Son Felt Time Pressure to Push Sprint Deal Forward (WSJ) In the end, SoftBank Corp. Chief Executive Masayoshi Son concluded that time was money. After a weekend of wheeling and dealing, he was willing to sweeten the Japanese company's bid for Sprint Nextel Corp. that Mr. Son for weeks had been saying already was high enough. His hope with the new bid is to keep the acquisition on track for midsummer completion and resolve complications raised by a rival offer. Mr. Son agreed for SoftBank to throw another $1.5 billion on top of the $20.1 billion already offered to achieve the "certainty of timing" for closing the deal in early July, a person familiar with the new proposal said. Pattern of negative correlation between HY bonds and treasuries has been broken (Sober Look) Since the financial crisis, the correlation between treasuries and many credit assets such as high yield bonds (HY) has been strongly negative. ... Recent events however broke that pattern. We've had a number of days with both the longer dated treasuries and HY selling off. That means the HY asset class is now responding to rate moves (not just spread). The 3-month correlation between prices of longer dated treasuries and HY bonds is nearing zero. This move toward a "less negative" correlation with treasuries is also visible in other credit assets as well. Sub-investment-grade credit investors are all of a sudden paying much closer attention to rates. US warns EU against exempting film industry from trade talks (FT) The US government has warned Brussels that EU efforts to placate French demands to exempt its film industry from high-profile transatlantic trade talks could unleash a torrent of demands in Washington for similar reciprocal carve-outs that would imperil a comprehensive deal. ... José Manuel Barroso, the European Commission president, met European filmmakers on Tuesday, including “The Artist” star Bérénice Bejo, to reassure them the trade deal will not jeopardise their protections. “Let me state loud and clear: the cultural exception is not negotiable,” Mr Barroso said after the meeting. Most Americans Aren’t Excited About Their Jobs (WSJ) FYI. State Dept. officials deny prostitution cover-up allegations (CBS) The allegations were first brought to light by CBS News' John Miller, who reported that according to an internal State Department Inspector General's memo, several recent investigations were influenced, manipulated, or simply called off. One specific example mentioned in the memo refers to the 2011 investigation into an ambassador who "routinely ditched ... his protective security detail," and inspectors suspect this was in order to "solicit sexual favors from prostitutes." ... In response to the allegation, Gutman said on Tuesday: "I am angered and saddened by the baseless allegations that have appeared in the press and to watch the four years I have proudly served in Belgium smeared is devastating. I live on a beautiful park in Brussels that you walk through to get to many locations and at no point have I ever engaged in any improper activity."

Opening Bell: 12.05.12

Global Banking Under Siege as Nations Tighten Local Rules (Bloomberg) Regulators want to curtail risks exposed after global banks such as New York-based Citigroup, Edinburgh-based Royal Bank of Scotland and Zurich-based UBS took bailouts in the biggest financial crisis since the Great Depression. Forcing lenders to dedicate capital and liquidity to multiple local subsidiaries, rather than a single parent, may undermine the business logic of a multinational structure. “Being big and spread out all over the world isn’t what it used to be,” said Mayra Rodriguez Valladares, managing principal at New York-based MRV Associates, which trains bank examiners and executives at financial firms. “You’ll see global banks jettison divisions abroad and at home.” Paulson Said to Blame Bet Against Europe for Most of Loss (Bloomberg) John Paulson, manager of $20 billion in hedge funds, told investors that the bulk of his losses this year came on bets that the European sovereign-debt crisis would worsen, according to a person familiar with the matter. Paulson, speaking to clients at his firm’s annual meeting yesterday in New York, said he has reduced those positions following European Central Bank President Mario Draghi’s comments in July that the ECB was committed to preserving the euro, said the person, who asked not to be identified because the meeting was private. Paulson said in a February letter to investors that the euro was “structurally flawed” and would eventually fall apart. In April, the founder of New York-based Paulson & Co. told clients he was wagering against European sovereign bonds and buying credit-default swaps on European debt, or protection against the chance of default. No Payback For Singer This Year (NYP) Paul Singer’s last-ditch attempt to get cash from Argentina this year has failed. A motion by Singer’s hedge fund, Elliott Management, requesting that the South American country put up a security deposit of $250 million by Dec. 10 was denied by a federal appeals court yesterday. “Since we will not have a big payment for ages (if ever), this looks like a huge blow to [Elliott’s] strategy,” said sovereign-debt expert Anna Gelpern. In Tax Fight, G.O.P. Seeks a Position to Fall Back On (NYT) Senator Olympia J. Snowe of Maine, who is retiring, joined a handful of other Republicans on Tuesday suggesting that Congress should pass the middle-class tax cut extensions now, then leave the fight over taxes and spending until later. Americans, she said, "should not even be questioning that we will ultimately raise taxes on low- to middle-income people." Congress could take that off the table "while you're grappling with tax cuts for the wealthy," she said. But any move toward compromise with Democrats on fiscal issues quickly comes under attack from conservatives as a surrender and unsettles the rank-and-file. It is a dynamic that has haunted Speaker John A. Boehner throughout the 112th Congress, as he has repeatedly been caught between the imperative to govern and the need to satisfy the restive right. Mr. Boehner, of Ohio, has drawn fire this week for removing a handful of House Republicans who have defied the leadership from their preferred committee seats, a step he took to enforce party discipline. Fed to launch fresh bond buying to help economy (Reuters) The Federal Reserve is set to announce a fresh round of Treasury bond purchases when it meets next week, avoiding monetary policy tightening to maintain support for the weak U.S. economy amid uncertainty over the looming year-end "fiscal cliff." Many economists think the U.S. central bank will announce monthly bond purchases of $45 billion after its policy gathering on December 11-12, signaling it will continue to pump money into the U.S. economy during 2013 in a bid to bring down unemployment. Merkel Wins Party Reelection, Eyes Third Term (Reuters) Merkel, at the height of her popularity, was returned unopposed as CDU chairwoman with 97.9 percent of votes from delegates who stood and applauded her for nearly eight minutes after she lauded Germany's economic resilience in the euro crisis and promised to fight for jobs and prosperity. McAfee Emerges From Hiding in Guatemala (FT) John McAfee, the antivirus software entrepreneur, has revealed that he has fled to Guatemala from Belize where he is wanted for questioning in relation to a murder. Posting on his website on Tuesday, the US citizen and multimillionaire said: "I apologize for all of the misdirections over the past few days . . . I am in Guatemala." His emergence closes one chapter in a bizarre chain of events that started last month when police in Belize, where Mr McAfee has lived for the past four years, discovered the dead body of Gregory Faull, the owner of a house close to Mr McAfee's main property on the island of Ambergris Caye. Mr McAfee - who Belize considers "a person of interest" in the murder investigation - fled, going into hiding and insisting on his innocence. He said he ran from the police because he believed that the Belize authorities were out to kill him. In response, Dean Barrow, the prime minister, said: "I don't want to be unkind to the gentleman, but I believe he is extremely paranoid". Mr McAfee revealed his location on Tuesday after a hacker called Simple Nomad disclosed his whereabouts by analyzing a mobile-phone photograph taken of McAfee on Monday that was posted on the internet. In a second blog post late Tuesday titled "the new fight", Mr McAfee said he had asked Telsforo Guerra, a former attorney-general of Guatemala, to help uncover what he claims is deep-rooted corruption in Belize. Separately, he told Reuters that Mr Guerra was trying to help him obtain political asylum in Guatemala, even though Belizean authorities have not charged him. EU Banks To Repay Cheap Loans (WSJ) Nearly a year ago, hundreds of European banks borrowed a total of more than €1 trillion ($1.3 trillion) from the European Central Bank as it scrambled to defuse an escalating crisis. Today, in a sign of the industry's partial healing, some of Europe's biggest banks are preparing to repay those loans. The push to repay the loans, however, has generated concerns that banks are moving prematurely and could be vulnerable if the euro-zone crisis intensifies again. The ECB activated the emergency loan program—known as the long-term refinancing operation, or LTRO—late last year, doling out two batches of inexpensive loans that are good for three years. Banks are permitted to repay them starting next month. Euro Crisis Feeds Corruption as Greece Slides in Rankings (Bloomberg) The European debt crisis has given way to a new wave of corruption as some of the most hard-hit countries in the turmoil have tumbled in an annual graft ranking, watchdog group Transparency International said. Greece, in its fifth year of recession and crippled by rounds of austerity, fell to 94th place from 80th -- ranking it below Colombia and Liberia, according to the group’s Corruption Perceptions Index. Ireland, Austria, Malta and Italy were also among member states in the single currency to slide. Moynihan: No Stress (Bloomberg) Bank of America CEO Brian T. Moynihan said the firm has plenty of capital and he’s confident it will pass the next US stress tests. “The question will be what to ask for and when, because we’re not going to fail this,” Moynihan said yesterday at a New York investor conference sponsored by Goldman Sachs. Moynihan, 53, is renewing efforts to win approval to raise the company’s dividend or repurchase shares after the Federal Reserve blocked an earlier request. Fed Filcher Gets Timeout (NYP) Bo Zhang, a Chinese-citizen computer programmer who worked for a contractor at the New York Fed, was sentenced to six months of home confinement for stealing Treasury Department software. Snake on a plane forces emergency landing (CNN) ...the incident forced the pilot to make an emergency landing in the Egyptian resort town of Al Ghardaqa on the Red Sea, according to The Jordan Times. An Egypt Air official told the paper an investigation revealed that a 48-year-old passenger, who owns a reptile shop in Kuwait, had hidden the Egyptian cobra in a carry-on bag. The passenger was trying to control the snake after it bit his hand and started slithering under the seats. The Egyptian daily al-Masry al-Youm reported that the man refused medical treatment, claiming his wound was only superficial. The plane resumed its flight to Kuwait after local authorities confiscated the snake. Doctors told the passenger he should spend 24 hours in a hospital for observation, but the man refused, the Egyptian Air official said, according to The Jordan Times.