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Opening Bell: 1.3.17

Anshu Jain starts afresh at Cantor Fitzgerald; Jamie Dimon to keep JPMorgan in London; Facebook censors ancient sea God's junk; and more.
(Getty Images)

(Getty Images)

Jain Finds His Second Act as Ex-Deutsche Bank Chief Joins Cantor (BBG)

Jain, who stepped down as co-chief executive officer of Germany’s largest bank in mid-2015, will join Cantor Fitzgerald LP as president in coming weeks to help the New York-based firm grow businesses including trading and prime brokerage. His new employer’s financial services and real estate units collectively have more than 10,000 workers -- but that’s just a 10th what Jain previously led.

Another Madoff Legacy: Ways for Investors to Keep Ponzi Profits (BBG)

The legal fallout from Bernard Madoff’s epic fraud includes an ironic twist: a road map for investors wanting to hold on to profits that seem too good to be true. In the eight years since Madoff’s arrest, a series of recent court decisions have favored investors who profited from the scam, dashing the hopes of trustee Irving Picard to return more to Madoff’s victims who lost $17.5 billion in principal.

Jamie Dimon: I wish JP Morgan could keep it all in London (Financial News)

“A major fear to me about Brexit is that it causes the EU to fail down the road,” Dimon said in a recent interview at JP Morgan’s offices in London. He proclaimed a “love” for London, but provided no reassurance that JP Morgan wouldn’t move business from the City to the continent after Brexit takes effect. “I wish we could keep it all here,” said Dimon, who wore a pair of cufflinks made from British coins. “I think it’s very good for Europe.”

Wall Street, America’s New Landlord, Kicks Tenants to the Curb (BBG)

Now among America’s biggest landlords, some of these companies are leaving tenants like Allen in the cold. In a business long dominated by mom-and-pop landlords, large-scale investors are shifting collections conversations from front stoops to call centers and courtrooms as they try to maximize profits.

Indonesia Cuts Ties With J.P. Morgan Over Downgrade (WSJ)

“We don’t close ourselves to assessment because it’s important for us to improve ourselves,” Finance Minister Sri Mulyani said. “But the institutions with big names have very high responsibility in creating positive psychology instead of doing [something] misleading.”

Paris Eyes Luring 20,000 Bankers From London Amid Brexit Rupture (BBG)

Paris will make its case to London-based executives in a series of February meetings as it competes for talent with rival cities such as Frankfurt. Europlace’s marketing materials show it will extol how Paris already employs more than 180,000 financiers, is home to the region’s biggest bond market and boasts the second-largest pool of asset managers.

Starting 2017 In The Right Spirit… With A Contender For The Most Depressing Chart In Europe (FT Alphaville)

With both sales and buybacks not being the drivers of poor earnings, we believe European companies face a lack of improved profit margins. In fact, for the first time since 1990, European profit margins have stagnated at a time when US margins have improved. The gap in profitability is the widest seen during this time period.

Facebook 'Censors' Nude Statue of Sea God Neptune, The Well-Known Renaissance Symbol of Northern Italian City (Daily Telegraph)

A virile, muscled statue of the sea god Neptune has fallen foul of Facebook’s prudish policies on nudity after an Italian art historian was told to remove it from her web page. In a statement, Facebook told her: “The use of the image was not approved because it violates Facebook’s guide lines on advertising. It presents an image with content that is explicitly sexual and which shows to an excessive degree the body, concentrating unnecessarily on body parts.”

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Opening Bell: 11.21.17

Yellen out; Wells Fargo's equity analyst bot is batting 0-for-1; maybe corporate private jets are good; Jamie Dimon has complex feelings about the national debt; sky penises; and more.

Opening Bell: 05.14.12

JPMorgan Loss Claims Official Who Oversaw Trading Unit (NYTimes) The $2 billion trading loss at JPMorgan Chase will claim its first casualty among top officials at the bank as early as Monday, with chief executive Jamie Dimon set to accept the resignation of the executive who oversaw the trade, Ina R. Drew. Ms. Drew, a 55-year-old banker who has worked at the company for three decades and serves as chief investment officer, had repeatedly offered to resign since the scale of the loss became apparent in late April, but Mr. Dimon had held off until now on accepting it, several JPMorgan Chase executives said. Two traders who worked for Ms. Drew also planned to resign, JPMorgan Chase officials said. Her exit would mark a stunning fall from grace for one of the most powerful women on Wall Street, as well as a trusted lieutenant of Mr. Dimon...Former senior-level executives at JPMorgan said it was a shame that Ms. Drew has ended up suffering much of the fallout from the soured trade. They said that Thursday’s announcement of the $2 billion loss was the first real misstep that Ms. Drew has had and said that the position was not meant to drum up bigger profits for the bank, but rather to ensure that JPMorgan could continue to hold lending positions in Europe. “This is killing her,” a former JP Morgan executive said, adding “in banking there are very large knives.” Jamie Dimon: Trading Losses Are Not Life-Threatening (CNBC) “This is a stupid thing that we should never have done but we’re still going to earn a lot of money this quarter so it isn’t like the company is jeopardized,” he said in an interview with NBC’s “Meet with Press.” “We hurt ourselves and our credibility, yes — and that you’ve got to fully expect and pay the price for that.” Yahoo’s Thompson Out Amid Inquiry; Levinsohn Is Interim CEO (Bloomberg, earlier) Thompson, 54, was brought on to orchestrate a turnaround after Google Inc. and Facebook Inc. lured users and advertising dollars. Thompson’s undoing stems from erroneous biographical references to him as holding a bachelor’s degree in computer science from Stonehill College. A former EBay Inc. (EBAY) executive, he earned a degree in accounting from the Easton, Massachusetts- based school, and the information is correctly listed in EBay regulatory filings and some Yahoo press releases. The incorrect degree showed up in Yahoo’s April 27 10-K filing, as well as on the company’s website. As part of the board changes, Daniel Loeb, chief executive officer of Third Point, joins as a director along with Harry Wilson and Michael Wolf. A fourth nominee, Jeffrey Zucker, said in today’s statement that he withdrew his nomination to allow a quick transition. Euro Officials Begin to Weigh Greek Exit (Bloomberg) Greek withdrawal “is not necessarily fatal, but it is not attractive,” European Central Bank Governing Council member Patrick Honohan said in Tallinn on May 12. An exit was “technically” possible yet would damage the euro, he said. German Finance Minister Wolfgang Schaeuble reiterated in an interview in Sueddeutsche Zeitung that member states seeking to hold the line on austerity for Greece could not force the country to stay. LightSquared Moves Toward Bankruptcy Filing (WSJ) Hedge-fund manager Philip Falcone's LightSquared Inc. venture was preparing Sunday to file for bankruptcy protection after negotiations with lenders to avoid a potential debt default faltered, said people familiar with the matter. LightSquared and its lenders still have until 5 p.m. Monday to reach a deal that would keep the wireless-networking company out of bankruptcy court, and there were some indications over the weekend that a final decision hadn't yet been reached on its fate. Still, the two sides remained far apart, and people involved in the negotiations expected LightSquared to begin making bankruptcy preparations in earnest. Facebook cofounder living large in Singapore as he stiffs US for a possible $600M in taxes (NYP) Saverin is renouncing his US citizenship in favor of Singapore, the Southeast Asian city-state that has no capital-gains tax, where he has lived like royalty since 2009. The move already has saved him about $288 million in taxes, and will save him much more if he chooses to sell his $4 billion personal stake in Facebook, which goes public next week. “This pisses me off,” fellow tech-industry billionaire Mark Cuban spat on Twitter Friday upon hearing news of Saverin’s decision. Saverin’s spokesman has defended the move, claiming he has investments in the Far East, and Europe and the permanent move makes perfect sense. “Eduardo recently found it more practical to become a resident of Singapore since he plans to live there for an indefinite period of time,” Saverin’s spokesman told Bloomberg. JPMorgan Unit's London Staff May Go as Loss Prompts Exits (Bloomberg) The entire London staff of JPMorgan Chase’s chief investment office is at risk of dismissal as a $2 billion trading loss prompts the first executive departures as soon as this week, a person familiar with the situation said. The firm is examining whether anyone in the unit, which employs a few dozen people in London, sought to hide risks, said the person, who requested anonymity because the deliberations are private. In Wake Of JPMorgan Loss, Rivals Fret About New Rules, Downgrades (WSJ) Over the weekend, rival banks scurried to explain why they believe a similar trading loss couldn't happen at their firm. Some companies pointed to moves already taken to reduce risk and sell off volatile and opaque assets such as derivatives on credit indexes. In a statement, Citigroup "has a small amount of straight-forward economic hedges managed at the corporate center to mitigate our credit exposure, principally relating to consumer loans." About half of that total is in cash, with most of the rest in U.S. Treasury bonds and other conservative investments. At Morgan Stanley, the portfolio most similar to J.P. Morgan's investment office is a $32 billion "available for sale" portfolio. The portfolio primarily consists of easily traded U.S. Treasury and government agency securities. It doesn't hold any derivatives instruments, a person familiar with Morgan Stanley's operations said. Goldman Sachs has no similar unit to the one at J.P. Morgan that suffered the loss. Apple Founder Wozniak to Buy Facebook Regardless of Price (Bloomberg) “I would invest in Facebook,” he said in an interview yesterday on Bloomberg Television. “I don’t care what the opening price is.” Missing: Stats on Crisis Convictions (WSJ) It is a question that has been asked time and again since the financial crisis: How many executives have been convicted of criminal wrongdoing related to the tumultuous events of 2008-2009? The Justice Department doesn't know the answer. That is because the department doesn't keep count of the numbers of board-level prosecutions. In a response earlier this month to a March request from Sen. Charles Grassley (R.,Iowa), the Justice Department said it doesn't hold information on defendants' business titles. "Consequently, we are unable to generate the [requested] comprehensive list" of Wall Street convictions stemming from the 2008 meltdown, the letter from the Department of Justice to Mr. Grassley said. Man Charged in Death Offers Victim's Foot for Deal (AP) A homeless man charged with killing and dismembering his friend says he can't remember much about the crime. But in a jailhouse interview, Leslie Sandoval told the Anderson Independent-Mail he remembers where he put the victim's missing left foot and is willing to tell a prosecutor if she will make him a deal. Sandoval says he went on a January drinking binge with Seth Foster. Foster's torso was found under an Anderson home, and his head, hands and right foot were found different places. Sandoval says he is confused about exactly what happened. But he disagrees with a coroner's finding he beat Foster and denies a claim from investigators that he confessed and gave them the knife used to dismember Foster.

Opening Bell: 05.21.12

JPMorgan CIO Risk Chief Said To Have Trading-Loss History (Bloomberg) Irvin Goldman, who oversaw risks in the JPMorgan Chase & Co. (JPM) unit that suffered more than $2 billion in trading losses, was fired by another Wall Street firm in 2007 for money-losing bets that prompted a regulatory sanction at the firm, Cantor Fitzgerald LP, three people with direct knowledge of the matter said. JPMorgan appointed Goldman in February as the top risk official in its chief investment office while the unit was managing trades that later spiraled into what Chief Executive Officer Jamie Dimon called “egregious,” self-inflicted mistakes. The bank knew when it picked Goldman that his earlier work at Cantor led regulators to penalize that company, according to a person briefed on the situation. Risk Manager's Past Scrutinized (WSJ) Mr. Goldman joined J.P. Morgan's CIO in January 2008 as a trader. The bank placed him on leave in September 2008 after it learned that NYSE Arca had opened a regulatory inquiry tied to his trading activities at Cantor Fitzgerald, people familiar with the matter said. After J.P. Morgan placed him on leave, Mr. Goldman founded a consulting firm based in New York called IJG Advisors LLC. He rejoined J.P. Morgan in September 2010 in the Chief Investment Office, this time focusing on strategy. Current J.P. Morgan Chase Chief Risk Officer John Hogan chose Mr. Goldman to serve as CRO of the office, a position that had been filled by Peter Weiland, who remains with J.P. Morgan's CIO. Mr. Hogan wasn't aware of the Cantor Fitzgerald incident or the earlier trading losses at J.P. Morgan Chase, said a person close to the bank. Eurobonds To Be Discussed At EU Summit (Reuters) Merkel has said she is not opposed to jointly underwritten euro area bonds per se, but believes it can only be discussed once the conditions are right, including much closer economic integration and coordination across the euro zone, including on fiscal matters. That remains a long way off. Will Greece Be Able to Print Drachma in a Rush? (Reuters) If or when policymakers finally decide Greece should leave the euro, the exit could happen so quickly that "new drachma" currency notes might not be printed in time. "It would be chaos," says Marios Efthymiopoulos, a visiting scholar at Johns Hopkins University Center for Advanced International Studies and president of Thessaloniki-based think tank Global Strategy. "The banks would collapse and you would have to nationalize them. You wouldn't be able to pay anyone except in coupons. There is only one (currency) printing press in Greece. It is in the museum in Athens and it doesn't work any more." Ryanair CEO: ‘No’ Campaigners in Irish Vote Are Crazy (CNBC) “I think Ireland will vote yes in the referendum and Ireland should vote yes. We have no alternative. People who are borrowing $15 billion a year to keep the lights turned on don’t have the wherewithal to vote no to the people that are lending them the money. There is no argument for voting no,” Michael O'Leary, CEO of budget airline Ryanair said. He described “no” campaigners as a “bunch of idiots and lunatics.” Barclays To Sell Entire BlackRock Stake (WSJ) Barclays said BlackRock agreed to repurchase $1 billion worth of the 19.6% stake that the bank holds in the asset-management company. The remainder of the stake will then be listed on a stock exchange. The decision to sell comes as the bank faces pressure from investors to boost its return on equity and prepares to mitigate the effects of regulation that will force the lender to hold a bigger capital buffer. Mark Zuckerberg Gets Married (AP) The couple met at Harvard and have been together for more than nine years, a guest who insisted on anonymity said. The ceremony took place in Zuckerberg's backyard before fewer than 100 guests, including Facebook's chief operating officer Sheryl Sandberg. The guests all thought they were coming to celebrate Chan's graduation but were told after they arrived that the event was in fact a wedding. "Everybody was shocked," the guest said. The two had been planning the marriage for months but were waiting until Chan had graduated from medical school to hold the wedding. The timing wasn't tied to the IPO, since the date the company planned to go public was a "moving target," the guest said. Zuckerberg designed the ring featuring "a very simple ruby." Hedge Funds Rebuild Euro Bear Bets On Greek Exit Banks Weigh (Bloomberg) Hedge funds and other large speculators, which pared trades that would profit from a drop in the euro to the lowest levels since November, rebuilt them to a record high last week, figures released May 18 by the Washington-based Commodity Futures Trading Commission showed. The premium for options that grant the right to sell the euro has more than doubled since March. Nasdaq CEO Blames Software Design For Delayed Facebook Trading (Bloomberg) Nasdaq OMX Group, under scrutiny after shares of Facebook Inc. were plagued by delays and mishandled orders on its first day of trading, blamed “poor design” in the software it uses for driving auctions in initial public offerings. Fed Proves More Bullish Than Wall Street Forecasting U.S. Growth (Bloomberg) Stephen Stanley, chief economist at Pierpont Securities LLC, has derided the Federal Reserve for downplaying improvement in the U.S. economy. Yet his 2.6 percent forecast for growth this year is below the midpoint in the central bank’s projection of 2.4 percent to 2.9 percent...“I’ve been banging my head against the wall,” said Stanley in Stamford, Connecticut, a former researcher at the Federal Reserve Bank of Richmond, who had predicted an interest- rate increase as early as last year and now says the Fed probably will tighten in the middle of next year. “They’re willing to let things run for longer and let inflation accelerate more than historically.” Judge mulls suit vs. woman sending messages to driving boyfriend (NYP) In a case believed to be the first of its kind in the country, a New Jersey college student could be held liable this week for texting her boyfriend — knowing he was behind the wheel — and allegedly causing him to crash into a couple riding a motorcycle. “She texts. Instantly, he texts back, and, bang, the accident occurs,” said Skippy Weinstein, attorney for motorcycle enthusiasts David and Linda Kubert, both 59, who lost their left legs in the horrific 2009 accident in Mine Hill. It’s now up to a Superior Court judge in Morristown, NJ, to decide whether Shannon Colonna can be added to the suit against driver Kyle Best.

(Getty Images)

Opening Bell: 1.10.17

French banks rebuff Le Pen; big banks losing junk debt deals to boutiques; Iran's porn shield goes haywire; and more.

Opening Bell: 05.23.12

Merkel Heads For Debt Showdown With Hollande At EU Summit (Bloomberg) German Chancellor Angela Merkel said she won’t shy away from disagreeing with French President Francois Hollande at the summit in Brussels over dinner at 7 p.m., the next major appointment of leaders seeking to allay concerns that Greece may quit the euro, putting Spain and Italy at risk as well. Good cooperation “doesn’t exclude differing positions,” Merkel told reporters yesterday in Chicago during a meeting of the North Atlantic Treaty Organization. “These may very well arise in the context of the European discussions.” Morgan Stanley Says It Played By Rules In Facebook’s IPO (Bloomberg) “Morgan Stanley followed the same procedures for the Facebook offering that it follows for all IPOs,” Pen Pendleton, a spokesman for the New York-based investment bank, said yesterday in an e-mailed statement. “These procedures are in compliance with all applicable regulations.” Inside Facebook's Fumbled Offering (WSJ) Interviews with more than a dozen people involved in the IPO reveal that Facebook approached its deal differently than companies typically do. Facebook CFO Ebersman kept a close grip on every important decision on the stock offering, not deferring to his bankers the way many companies do, according to the people familiar with planning...Mr. Ebersman had asked Facebook's early shareholders to fill out a form indicating how many shares they would like to sell in the IPO and at what price, and to indicate whether they would be willing to sell more if the share count was increased, the person said. When Mr. Ebersman learned from Mr. Grimes that there was outsize investor demand, he went back to those forms and reached out to early shareholders to cash out more stock, the person said. Gupta On Rajaratnam's VIP List (NYP) Jailed hedge fund manager Raj Rajaratnam deemed only a handful of people — including ex-Goldman Sachs director Rajat Gupta — important enough to disturb his trading day, Rajaratnam’s former assistant testified yesterday in Manhattan federal court. Carlyn Eisenberg, the government’s first witness in the trial of Gupta on insider-trading charges, said his name was on a “special list” of those whose calls she was to put through to her then-boss. She said it was one of those calls in September 2008 that triggered a flurry of trading activity at Rajaratnam’s Galleon Group, shortly before Goldman Sachs announced it had landed a $5 billion investment from famed investor Warren Buffett...Eisenberg recalled getting a call several years ago from a man whose voice she recognized as being on the list at the time, although she said she couldn’t identify it now as belonging to Gupta. The call, which phone records later showed came from Gupta’s McKinsey & Co. office, arrived minutes before the close of markets on Sept. 23, 2008, according to Eisenberg. The caller “said it was urgent and he needed to speak to Raj,” she told jurors. After Rajaratnam took the call, he immediately brought Galleon co-founder Gary Rosenbach into his office. When Rosenbach emerged, he began making calls, saying, “buy Goldman Sachs,” Eisenberg testified. More Finance Chiefs Willing To Pay Bribes, Global Survey Finds (Bloomberg) Fifteen percent of chief financial officers around the world are willing to make cash payments to win or retain business, according to a survey of executives interviewed by the accounting firm Ernst & Young LLP. The firm’s annual “global fraud survey” of 400 finance chiefs, interviewed from November to February, found a greater tolerance of bribery compared with the previous year, when 9 percent said they would make cash payments. Five percent of CFOs said they would misstate financial performance, while 3 percent said that the year before, according to the survey. Troubleshooter In Running To Succeed Dimon (FT) For relaxation, Matt Zames shoots things. Mostly birds. But the 41-year-old JPMorgan Chase executive does not have much free time for hunting now. He is busy mopping up his bank’s biggest mess since the financial crisis. Last week Mr Zames was appointed to replace Ina Drew as head of the bank’s chief investment office, whose London-based trading unit has wiped $30bn off its parent’s market capitalisation. “When you’re in a difficult spot you find out who you want to be in a foxhole with,” says Jamie Dimon, chief executive of JPMorgan. “Matt puts his hand up.” Barclays To Sell Entire BlackRock Stake For $5.5 Billion (Bloomberg) The lender sold about 26.2 million shares to money managers for $160 each, London-based Barclays said in a statement yesterday. Underwriters have the option to purchase an additional 2.6 million. New York-based BlackRock will buy back a further 6.38 million shares at $156.80 per share, about 8.8 percent less than the stock’s $171.91 close on May 18, the last trading day before the deal was announced. Tall Tales About Private Equity, By Steve Rattner (NYT) To be sure, some of Bain’s large leveraged buyouts — notably, Domino’s Pizza — added jobs. But Mr. Romney left Bain Capital two months after the Domino’s investment (7,900 new jobs claimed) was finalized. Aware of private equity’s reputation, Mr. Romney still trots around the country erroneously calling himself a “venture capitalist.” And in a further effort to deflect attention from the Bain Capital debate, Mr. Romney last week argued that President Obama was responsible for the loss of 100,000 jobs in the auto industry over the past three years. That’s both ridiculously false (auto industry and dealership jobs have increased by about 50,000 since January 2009) and a remarkable comment from a man who said that the companies should have been allowed to go bankrupt and that the industry would have been better off without President Obama’s involvement. Adding jobs was never Mitt Romney’s private sector agenda, and it’s appropriate to question his ability to do so. Stryker CEO Sought Nod For Romance (WSJ) Mr. MacMillan, 48 years old, was forced out partly because certain board members became bothered by his handling of a relationship with a former flight attendant for the company's corporate jets while his wife pursued a divorce, according to people familiar with the matter. What distinguishes his story from others in this well-worn genre is that, according to a person familiar with Mr. MacMillan's version of events, the CEO approached Mr. Parfet and Louise Francesconi, head of the board's governance and nominating committee, in late September seeking their approval to date the employee, Jennifer Koch. Facebook Analysts Who Shunned Herd Now Look Like Heroes (Bloomberg) The social networking site lost 19 percent through yesterday to $34.03 after opening at $42 on May 18. That’s consistent with warnings from Richard Greenfield of BTIG LLC and Brian Wieser of Pivotal Research Group LLC, who says the stock will slip as low as $30. It left five firms with bullish calls predicting an average rally of 36 percent and one, Tom Forte of Telsey Advisory Group, saying shares may rise 47 percent to $50.

Opening Bell: 06.01.12

Employment In U.S. Increased 69,000 In May (Bloomberg) American employers in May added the smallest number of workers in a year and the unemployment rate unexpectedly increased as job-seekers re-entered the workforce, further evidence that the labor-market recovery is stalling. Payrolls climbed by 69,000 last month, less than the most- pessimistic forecast in a Bloomberg News survey, after a revised 77,000 gain in April that was smaller than initially estimated, Labor Department figures showed today in Washington. The median estimate called for a 150,000 May advance. The jobless rate rose to 8.2 percent from 8.1 percent, while hours worked declined. JPMorgan Probe Widens (WSJ) Federal regulators are using powers they gained in the Dodd-Frank financial overhaul law to ramp up an inquiry into the recent trading blunders at J.P. Morgan Chase, people close to the investigation said...The probe focuses on what J.P. Morgan traders told their supervisors and internal risk-management staff as their wrong-way bets started to sour, the people said. If investigators find that employees made deceptive statements to superiors, that could constitute fraud under their authority to police the so-called swaps market...The probe could mark the agency's first use of tools it was granted in the Dodd-Frank Act of 2010. The measure extended the CFTC's oversight and lowered the bar for bringing certain cases. JPMorgan’s Iksil Said To Take Big Risks Long Before Loss (Bloomberg) Iksil’s value-at-risk was typically $30 million to $40 million even before this year’s buildup, said the person, who wasn’t authorized to discuss the trades. Sometimes the figure could surpass $60 million, the person said. That’s about as high as the level for the firm’s entire investment bank, which employs 26,000 people. Josh Fink On A Losing Streak (NYP) Josh Fink, the son of BlackRock chairman Larry Fink, is losing money hand over fist in his hedge fund, Enso Global Fund. Enso fell 60.5 percent last year, and is down more than 7 percent through April. As a result of the losses, the 34-year-old Fink now manages just $44 million, down from as much as $700 million in 2008. ‘Fear of the Future’ Keeps Lid on Economic Growth Says Greenspan (CNBC) The former central bank leader — nicknamed "The Maestro" by his supporters — said he worries the current economy could be heading on a path similar to 1979, when the 10-year Treasury note was yielding around 9 percent before surging dramatically, gaining 4 percentage points in just a few months. "I listen to a lot of what people say that we don't have to worry. We can do it in our own time," Greenspan said in regard to trying to bring down Washington's $1.2 trillion budget gap. "Good luck. The markets have not been told this." This Summer an 'Eerie Echo' of Pre-Lehman: Zoellick (CNBC) The summer of 2012 is looking like an “eerie” echo of 2008 but euro zone sovereign debt has replaced mortgages as the risky asset class that markets are anxious about, said Robert Zoellick, President of the World Bank. “The European Central Bank, like the U.S. Federal Reserve in 2008, has sought to reassure markets by providing generous liquidity, but collateral quality is declining as the better pickings on bank balance sheets are used up,” he added. To prevent investors from fleeing in panic, Europe must be ready with more than liquidity injections to contain the consequences of a possible Greek exit. “If Greece leaves the eurozone, the contagion is impossible to predict, just as Lehman (Brothers’ collapse) had unexpected consequences,” Zoellick said. Manhattan student who 'bedded' teacher scores $400 in wager with buddies (NYP) The high-school senior caught on camera locking lips with his hot-to-trot teacher won a bet with four of his buddies to see who would hook up with her first, The Post has learned. Eric Arty, 18, beat his pals — who each ponied up $100 — to win the jackpot as well as the affections of glamorous global-studies teacher Julie Warning, 26. “It was a bet with a group of his friends,” said Andrew Cabrera, a junior at Manhattan Theater Lab HS, where Warning worked until Tuesday, when she was reassigned to an administrative job. Cabrera said yesterday that Arty began the race as a long shot. “He would go after class and basically try to seduce her,’’ he said. “I don’t know if she knew [about the bet]. They were all trying to get with her. One of his [Arty’s] friends flirted with her more than anyone — I thought he would be the one, but Eric came out of nowhere and got her.” Spain Says It Has Months To Raise Bailout Funds (WSJ) Spain's government says it has until at least October to raise the funds it needs for the €19 billion ($23.5 billion) rescue of lender Bankia SA, a move government officials hope will let Madrid pick the right moment to raise funds from financial markets and explore other funding options as it aims to avoid an international bailout. "We don't have to raise the money right away, and when we do, it doesn't have to be all at once," a government spokeswoman said. Euro-Zone Data Deepen Gloom (WSJ) European Union statistics agency Eurostat said there were 17.4 million people without jobs in the 17 nations that use the euro in April, an increase of 110,000 since March and 1.8 million higher than a year earlier. That's the highest total since comparable records began in January 1995, a spokesman said. Dimon Heading To The Hill (DJ) JPMorgan’s trader, Bruno Iksil, known as the “London Whale,” who is at the center of the bank’s $2 billion debacle, will not appear at a Senate Banking Committee hearing to discuss his role in causing the red ink. Instead, CEO Jamie Dimon appears set to square off against lawmakers alone on June 13. The once-unsullied bank executive will have to explain how he was blind to his Chief Investment Office’s outsized, wrong-way bet. Dimon is slated to meet with members of the House on June 19, sources said. Facebook Fiasco Coupled With European Crunch Freezes IPOs (Bloomberg) Facebook led U.S. initial public offerings to their worst monthly performance since Lehman Brothers Holdings Inc. collapsed, as Europe’s debt crisis scuttled IPO plans from New York to Hong Kong. The Bloomberg IPO Index (BIPO), which tracks U.S. equities in the first year after their IPOs, sank 15 percent last month, with Facebook posting the worst one-week performance among the 30 largest U.S. IPOs since 2011. The IPO index’s decline is in line with the drop in October 2008, the month after Lehman’s bankruptcy triggered the worst financial crisis since the Great Depression. Green Lantern latest superhero to be outed as gay in 'Earth 2' issue two, following Marvel's Northstar storyline (NYDN) DC Comics said Friday that Alan Scott, the original Green Lantern — a superhero first introduced in 1940 — will be reintroduced as gay in “Earth 2” issue two, hitting stores next Wednesday. The storyline was born out of the publisher’s reboot of their whole fictional universe last year, which reintroduces the heroes as younger versions of themselves again. The reboot effectively wrote out of existence Scott’s openly gay adult son, the superhero Obsidian. “I was sort of putting the team together and I realized one of the only downsides to relaunching the Justice Society as young, vibrant heroes again was that Alan Scott’s son was no longer going to exist in the reboot,” says “Earth 2” series writer James Robinson, who wrote a 1998 storyline about Obsidian that featured the first gay superhero kiss in comics. “I thought that was a shame and then it occurred to me, why not just make Alan Scott gay.”

Opening Bell: 12.28.12

Blackstone seen sticking with SAC despite insider trading probe (Reuters / Matthew Goldstein) Three sources said the asset management arm of Blackstone, which has $550 million invested with SAC Capital, is in no rush to redeem money from the Stamford, Connecticut-based hedge fund. Blackstone has had at least three discussions with the $14 billion hedge fund's executives about the insider trading investigation and talked to its own investors, which include state pension funds, endowments and wealthy individuals. Hitler parody leaves French bank BNP red-faced (IN24) French banking giant BNP was left red-faced this week after it emerged managers were shown a motivational video featuring a parody of a famous scene from the film "Downfall" in which Adolf Hitler is portrayed as the boss of Germany's Deutsche Bank. It’s a scene that has been parodied thousands of times before to comic effect. But it appears not many people have seen the funny side of one particular version made by executives of French bank BNP Paribas...In the video, which was shown to around 100 managers from around the world at a seminar in Amsterdam last year, Hitler is turned into a fuming boss of Germany’s Deutsche Bank reacting furiously to news that BNP has gained an edge in the foreign exchange market. But far from being motivated, many of the managers who saw the video were outraged. “We could not believe the bank had actually dared to do that – make an analogy between our competitors and the Nazi regime. It took us a few minutes to take it in,” one BNP employee told French daily Liberation, who revealed the story this week. “We were shocked. Nobody knew how to react. Some Jewish employees from the United States did not find it funny at all,” another employee told the paper. “If this video had been shown by an American bank it would have been a major scandal,” an angry BNP source added. Rather surprisingly the video is believed to have been uploaded to the bank’s internal Intranet site before the management realised it might prove embarrassing and quickly removed it. A spokeswoman for BNP told FRANCE 24 on Friday that the bank’s senior management were totally unaware the video had been made until they were contacted by Libération this week. The spokeswoman said BNP’s CEO Jean Laurent Bonnafé had called his counterpart at Deutsche Bank Jürgen Fitschen to personally apologise for the stunt. In a statement in Libération the bank added that the message in the video was “contrary to the values of BNP." Obama Summons Congress Leaders as Budget Deadline Nears (Bloomberg) Obama, who had been negotiating one-on-one with House Speaker John Boehner, will meet today with Republicans Boehner and Senate Minority Leader Mitch McConnell, and Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi, both Democrats. Cliff Talks Down To The Wire (WSJ) It is still possible the two sides can reach a deal, especially with the leaders meeting Friday. Any resolution would be a scaled-back version of the package Mr. Obama and congressional leaders had anticipated passing after the November election. The White House is pressing for the Senate to extend current tax rates for income up to $250,000, extend unemployment benefits, keep the alternative minimum tax from hitting millions of additional taxpayers and delay spending cuts set to take effect in January. The 11th-hour strategy carries enormous risk because it leaves no margin for error in Congress's balky legislative machinery. Senate Majority Leader Harry Reid (D., Nev.) said the prospects for passage of a bill before the last day of the year are fading rapidly. "I have to be very honest," he said. "I don't know time-wise how it can happen now." Spain's PM does not rule out asking for European aid (Reuters) Spanish Prime Minister Mariano Rajoy said on Friday he did not rule out tapping the European Central Bank's bond-buying program for troubled euro zone governments but said Spain did not expect to have to ask for aid for now. "We are not thinking of asking the European Central Bank to intervene and buy bonds in the secondary market," he said at a news conference in Madrid. "But we can't rule it out in the future." Banks pay $4.5M for muni charges (NYP) Citigroup and Bank of America’s Merrill Lynch are among five firms that will pay $4.48 million to settle regulatory claims they used funds from municipal and state bond deals to pay lobbyists. Local authorities were unfairly asked to reimburse payments that the firms made over five years to the California Public Securities Association, a lobbying group, to help influence the state, the Financial Industry Regulatory Authority, which oversees securities firms, said yesterday. The firms inadequately described the fees, wrapping them into bond-underwriting expenses, Finra said...The banks, also including Goldman Sachs, JPMorgan and Morgan Stanley, agreed to pay $3.35 million in fines and reimburse certain California bond issuers $1.13 million. Porsche Wins Dismissal of US Hedge Fund Lawsuit Over VW (Reuters) A five-justice panel of the New York State appeals court in Manhattan unanimously found that Porsche had met its "heavy burden" to establish that the state was the wrong place in which to bring the lawsuit. That panel reversed an Aug. 6 ruling by New York State Supreme Court Justice Charles Ramos that let the case by hedge funds including Glenhill Capital LP, David Einhorn's Greenlight Capital LP and Chase Coleman's Tiger Global LP proceed. The funds accused Porsche of engineering a "massive short squeeze" in October 2008 by quietly buying nearly all freely traded ordinary VW shares in a bid to take over the company, despite publicly stating it had no plans to take a 75 percent stake. IPOs Slump To Lowest Levels Since Financial Crisis (Bloomberg) IPOs have raised $112 billion worldwide this year, the least since 2008, according to data compiled by Bloomberg. Initial sales in western Europe dropped to one-third of last year’s level, while concern about China’s economy helped cut proceeds in Asia by almost half. U.S. offerings raised $41 billion, little changed from last year, as Facebook’s IPO spurred a monthlong drought in U.S. deals. Avery Johnson Jr. vents on Twitter after dad, Avery Johnson, is fired by Brooklyn Nets (NYDN, RELATED) The ex-Nets coach’s teenage son took to Twitter to vent after news broke that his dad had been given a pink slip by billionaire Mikhail Prokhorov and the Nets. “This is a f------ Outrage. My dad is a great coach, he just got coach of the month and they Fire him. #Smh. Completely new team he had,” Johnson Jr. wrote on Twitter. “The expectations were way to high for this team. We didn’t even have a losing record.... Didn’t even give my dad a full season. #OUTRAGE,” Johnson Jr. continued. Johnson was fired a day after the new-look Nets fell to .500 following a listless road loss to the Bucks. The canning comes on the heels of Deron Williams saying he’s never been comfortable playing in Johnson’s offense. Williams, who did not play in Wednesday night’s loss, is mired in a season-long shooting slump with field goal and 3-point percentages at career-worst levels. “I’m sorry (our) best players couldn’t make open shots. Yeah that’s my dad’s fault totally,” Johnson Jr. tweeted. 'Whale' Capsized Banks' Rule Effort (WSJ) Wall Street banks entered 2012 confident they could stall a wave of rules that they feared would hurt profits. But they are ending the year largely resigned that their activities will be constrained and monitored more closely by the government. One big reason for the change: J.P. Morgan Chase JPM -0.76% & Co.'s "London whale" losses. The bad trades, ultimately resulting in about $6 billion in losses, disrupted the banks' campaign against the Dodd-Frank financial overhaul, according to regulators, lawmakers and close observers of policy debates in Washington. The trades damaged the reputation of J.P. Morgan, which suffered less than other banks from the financial crisis, and its chief executive, James Dimon, during a crucial period of policy debate in Washington, putting critics of Dodd-Frank on the defensive. Before news of the whale losses emerged, banks were arguing, with some success, that too-tight regulations were crimping lending during a time of slow growth. Michael Greenberger, a finance professor at the University of Maryland and an advocate of regulations aimed at reining in bank trading, said that in early 2012 his allies' "backs were against the wall." "Then the London whale blew all of that out of the water," he said. Mortgages Fueled Hedge Funds To 13.9 Percent Gain (NYP) Hedge funds that invest in mortgage-backed securities gained 13.9 percent through November to make them the industry’s best-performing strategy, according to the Absolute Return index. Top players that did even better included Metacapital Management, Pine River, Axonic Capital, and Greg Lippman's LibreMax Capital. High-Speed Traders Race to Fend Off Regulators (WSJ) Defenders say high-frequency trading keeps markets lubricated with a constant supply of buy and sell orders that enables all participants to trade more efficiently and get better pricing. High-speed traders, supporters add, have helped foster competition among exchanges and other trading venues, lowering commission-based fees for small investors and helping bring down overall costs for mutual-fund managers. Another benefit some cite: Technology innovations spurred by high-speed traders serve to connect more investors to more trading venues, broadening their options in the markets. Critics, for their part, worry that the traders' order torrent makes markets more opaque, less stable and ultimately less fair. Will 'Fiscal Clif' Accelerate Millionaire Deaths? (NetNet) John Carney: "...it at least seems likely that some deaths that might otherwise have occurred shortly after January 1 will occur shortly before." Man gets DUI after driving on AA co-founder's lawn (AP) Vermont State Police say a man faces a drunken driving charge after driving onto the lawn of a historic home once owned by the co-founder of Alcoholics Anonymous. Police say 55-year-old Donald Blood III of Marlborough, Mass., was ordered to appear in court in Bennington on Jan. 14. Police say Blood thought he was driving into a parking lot, but actually it was the lawn of the Wilson House, built in 1852 in Dorset, the birthplace of AA co-founder Bill Wilson. The Wilson House's website describes it as a "place of sanctuary where people can come to give thanks to God for their new lives." It still hosts several AA meetings each week. Programming Note< : We’re on an abbreviated, vacation-esque schedule this week (opening news roundups and limited updates whenever the urge to reach out and touch you moves us). We still want to hear from you, though, so if anything happens that you think might tickle our fancy, do not hesitate to let us know.

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Opening Bell: 1.23.17

Trump faces the dollar down; Jamie Dimon likes the universal basic income; the super-rich are preparing for annihilation; and more.