Opening Bell: 10.13.17

The SEC wants to know what's going on between Bob Diamond and Guggenheim; Marc Cohodes makes amends with Overstock; the Russians have even infiltrated Pokemon Go; and more.
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By World Economic Forum [CC BY-SA 2.0], via Wikimedia Commons

By World Economic Forum [CC BY-SA 2.0], via Wikimedia Commons

SEC to Review Guggenheim’s Bob Diamond-Linked Investments (BBG)
Guggenheim has been a shareholder of Diamond’s African banking venture, Atlas Mara Ltd., since its 2013 initial public offering. Over time, the relationships have spread and gotten deeper, as Guggenheim mutual funds and insurers associated with the firm have invested in multiple Diamond-related companies.

Star Fidelity Manager Gavin Baker Fired Over Sexual Harassment Allegations (WSJ)
A star stock picker at the mutual-fund giant Fidelity was fired last month for allegedly sexually harassing a junior female employee, according to an attorney for the female employee and other people familiar with the matter. Gavin Baker was one of the Boston-based investment firm’s most well-known fund managers, placing bets on technology companies such as Uber and Tesla during his eight years at the helm of the $16.4 billion Fidelity OTC Portfolio. He is also well known in Silicon Valley among venture capitalists and startup firms, as well as in the asset management industry.

Bond Wizard Chris Rokos Hits a Bump (WSJ)
London-based Rokos Capital chalked up a 20% gain in 2016 in one of the hottest hedge-fund launches of recent years. But this year, the fund is down 1.2% through September.

Short-Seller Marc Cohodes Goes Long on Overstock (BBG)
“When he started reaching out to me, I was worried about, you know, was he going to plant a bomb in my living room or something,” Byrne said, joking about Cohodes. “I couldn’t believe that my old enemy was reaching out to me,” he said. Still, he welcomes the development. “How strange it is that we have found, after it all, that we could bury the hatchet, and not in each other’s necks?”

This Is Not Arthur Laffer’s Famous Napkin (NYT)
Among the clues: It is cloth, while the original napkin was paper. It is dated 9/13/74, while the original meeting took place after the November 1974 midterm elections. And it is inscribed to Donald H. Rumsfeld, then Ford’s chief of staff. Mr. Laffer met with Dick Cheney, Mr. Rumsfeld’s deputy. Mr. Laffer said he did draw on the Smithsonian’s napkin, but he most likely did so several years later, at the request of the journalist Jude Wanniski, who wanted a keepsake of the famous moment.

How would ETFs fare in a market downturn? (FT)
As Mr Bregman tells it, the flows since the financial crisis out of actively managed equity funds and into ETFs meant a surge of money heading for the largest, most liquid stocks. The original ETF idea has since been tweaked so fund managers do not need to hold every single underlying stock or bond in the index, to “fully replicate” in the jargon, but can hold the largest constituents and still mimic the index’s return (see box). The largest stocks are attracting money purely on account of their size — hence the fears of a bubble.

Bitcoin's market value is now larger than Goldman Sachs and Morgan Stanley (CNBC)
Bitcoin would be the 15th largest component of the Nasdaq and 58th largest by market cap on the NYSE. SEE ALSO: The Higher Bitcoin Gets, the Faster Bitcoin Goes

Even Pokémon Go used by extensive Russian-linked meddling effort (CNN)
The donotshoot.us website in turn links to a Tumblr account. In July 2016, this Tumblr account announced a contest encouraging readers to play Pokémon Go, the augmented reality game in which users go out into the real world and use their phones to find and "train" Pokémon characters. Specifically, the Don't Shoot Us contest directed readers to go to find and train Pokémon near locations where alleged incidents of police brutality had taken place.

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Opening Bell: 02.04.13

UK Regulators Could Split Banks (WSJ) U.K. Treasury chief George Osborne on Monday will announce new powers for regulators to split up banks that flout rules designed to ring-fence retail banking from riskier investment-banking activity. In a wide-ranging speech on banking in Bournemouth, England, Mr. Osborne is expected to say the new powers are needed so that taxpayers will never again be on the hook when banks fail, as they were during the financial crisis. "We're not going to repeat the mistakes of the past. In America and elsewhere, banks found ways to undermine and get around the rules," Mr. Osborne will say, according to the extracts of his speech. "We could see that again—so we are going to arm ourselves in advance. In the jargon, we will "electrify the ring fence." New Details Suggest a Defense in SAC Case (NYT) In bringing its charges, the government said that SAC not only sold out of its position, but also bet against — or shorted — the drug companies' stocks before the public announcement of the bad news. The SAC short position, according to prosecutors, allowed it to earn big profits after shares of the companies, Elan and Wyeth, plummeted. "The fund didn't merely avoid losses, it greedily schemed to profit further by shorting Elan and Wyeth stock," said April Brooks, a senior F.B.I. official in New York, during a press conference on Nov. 20, the day Mr. Martoma was arrested. Internal SAC trading records, according to people directly involved in the case, indicate that the hedge fund did not have a negative bet in place in advance of the announcement of the drug trial's disappointing results. Instead, the records indicated that SAC, through a series of trades, including a complex transaction known as an equity swap, had virtually no exposure — neither long nor short — heading into the disclosure of the drug data. Blackstone To Become Investment Bank? (FT) Blackstone, one of the world's largest alternative asset managers, has quietly secured a securities underwriting licence as its expanding capital markets operation strays into investment banking territory. The licence marks the latest stage in the transformation of big listed private equity groups as they become more broadly based alternative asset managers. Apollo and KKR , two of Blackstone's biggest rivals, also have securities underwriting licences. The move highlights the pressure listed private equity groups are under to generate new sources of fee income to satisfy their public shareholders. "The private equity business is lousy for shareholders," says the head of capital markets for one buyout firm that is not listed. Obama: more tax revenue needed to address deficit (Reuters) President Barack Obama said on Sunday more tax revenue would be needed to reduce the U.S. deficit and signaled he would push hard to get rid of loopholes such as the "carried interest" tax break enjoyed by private equity and hedge fund managers. Herbalife Is The Subject Of 'Pending' Probe (NYP) The Los Angeles-based distributor of nutritional products is the subject of a law enforcement investigation, The Post has learned. The existence of the probe emerged after the Federal Trade Commission, responding to a Freedom of Information Law request by The Post, released 192 complaints filed against Herbalife over the past seven years. New Orleans Braces From Fallout From Blackout (AP) The outage, blamed on an unspecified "abnormality" in the Superdome's power system, was an embarrassment for New Orleans, which was hosting its first Super Bowl since 2002 and was eager to show off how it has been rebuilt since Hurricane Katrina. Mayor Mitch Landrieu called Sunday night's outage "an unfortunate moment in what has been an otherwise shining Super Bowl week for the city of New Orleans." He said he expected to receive "a full after-action report from all parties involved" in the coming days...For 34 minutes, the players tried to stay loose, the fans milled about in darkened corridors, and stadium officials scrambled to figure out what went wrong. The Ravens barely hung on for a 34-31 victory over the San Francisco 49ers, needing a goal-line stand in the closing minutes to preserve the championship. "It really hurt us," Baltimore fullback Vonta Leach said. "We had lot of momentum." There is sure to be some fallout for the city and the Superdome — especially since New Orleans plans to bid for the title game in 2018, in conjunction with the 300th anniversary of its founding. Escalators stopped working and credit-card machines shut down, though auxiliary power kept the playing field and concourses from going totally dark. "We sincerely apologize for the incident," Superdome spokesman Eric Eagan said. Most fans seemed to take the outage in stride, even starting up the wave to pass the time. "So we had to spend 30 minutes in the dark? That was just more time for fans to refill their drinks," said Amanda Black of Columbus, Miss. Question of Aiding Cyprus Places Germany in a Bind (NYT) In recent days, Germany has signaled that it is reluctantly edging toward a bailout for Cyprus, a haven for Russian cash, after lifelines have been extended to Greece, Ireland and Portugal to prevent potentially calamitous defaults. While Cyprus makes up just a sliver of the euro zone economy, it is proving to be a first-rate political headache. "I don't think that Germany has ever in the history of the euro zone crisis left itself so little wiggle room," said Nicholas Spiro, the managing director of Spiro Sovereign Strategy in London. "But Germany wants the euro to succeed and survive, and they are saying we can't afford a Cyprus bankruptcy." BlackRock Sued by Funds Over Securities Lending Fees (Bloomberg) BlackRock is accused in a lawsuit by two pension funds of reaping “grossly excessive” compensation from securities- lending returns associated with iShares Inc. “Defendants have systematically violated their fiduciary duties, setting up an excessive fee structure designed to loot securities lending returns properly due to iShares investors,” the funds, which invest in iShares, said in a complaint in federal court in Nashville, Tennessee. Two Top Barclays Executives Resign (WSJ) Barclays, whose chairman, chief executive and chief operating officer all resigned last summer in the wake of a series of controversies, said Sunday evening that finance chief Chris Lucas and Mark Harding, its general counsel, will both be retiring in coming months...Messrs. Lucas and Harding were longtime Barclays veterans who worked closely with former CEO Robert Diamond, who resigned last summer after the bank admitted that it had tried to rig benchmark interest rates and paid a roughly $450 million penalty. Youngest American Woman Billionaire Found With In-N-Out (Bloomberg) Lunchtime at the flagship In-N-Out Burger restaurant in Baldwin Park, California, is a study in efficiency. As the order line swells, smiling workers swoop in to operate empty cash registers. Another staffer cleans tables, asking customers if they’re enjoying their hamburger. Outside, a woman armed with a hand-held ordering machine speeds up the drive-through line. Such service has helped In-N-Out create a rabid fan base -- and make Lynsi Torres, the chain’s 30-year-old owner and president, one of the youngest female billionaires on Earth. New store openings often resemble product releases from Apple, with customers lined up hours in advance. City officials plead with the Irvine, California-based company to open restaurants in their municipalities. “They have done a fantastic job of building and maintaining a kind of cult following,” said Bob Goldin, executive vice president of Chicago-based food industry research firm Technomic Inc. “Someone would love to buy them.” That someone includes billionaire investor Warren Buffett, who told a group of visiting business students in 2005 that he’d like to own the chain, according to an account of the meeting on the UCLA Anderson School of Management website. Mint officially ends distribution of Canadian penny (CP) The phasing-out of the penny will lurch ahead today with the Royal Canadian Mint officially ending its distribution of one-cent coins to Canada's financial institutions. The move comes nearly a year after Finance Minister Jim Flaherty announced the demise of the penny, whose production cost came to exceed its monetary value. But as it faces extinction in the pockets and tills of most Canadians, the humble penny is still in demand in some artistic circles where it retains significant value. Renee Gruszecki, a Halifax-based academic and archivist, has spent the past year making a living through a jewelry business devoted primarily to preserving the country's stray cents. About 30,000 strategically sorted pennies fill Gruszecki's home and eventually find their way into the accessories produced at Coin Coin Designs and Co. Gruszecki, a long-time collector of lucky pennies, believes her pieces will help preserve a symbol that is both an object of superstition and a Canadian icon. "The maple leaf is synonymous with everything Canadian. We all identify with it," she said in a telephone interview. "Now it's just no longer going to be present among us, so I'm saddened by that." The Bank of Canada's Currency Museum has already taken steps to preserve the penny's place in Canadian culture. A mural consisting of nearly 16,000 one-cent pieces has been assembled at the museum to commemorate the coin's history, said assistant curator Raewyn Passmore. The mosaic, which depicts a giant penny measuring about two square metres, is comprised of coins ranging from the lustrous to the tarnished.

Opening Bell: 5.9.16

Bob Diamond is back; Wall Street loves Hillary; CEOs know how bribes work, they see bribes all the time; "I tried to rip his balls off," woman confesses; and more.

Opening Bell: 04.01.13

Central Bank Details Losses at Bank of Cyprus (WSJ) Cyprus's central bank spelled out the financial damage to big deposit holders at Bank of Cyprus PCL, the country's biggest lender, saying they will lose almost 40% of their deposits as a result of a sweeping restructuring of the lender. Losses could grow even steeper in the months ahead. In a statement Saturday, Cyprus's central bank said that 37.5% of all deposits over €100,000 ($128,700) will immediately be converted into a special class of shares at the lender as part of its recapitalization plan. As Banks in Cyprus Falter, Other Tax Havens Step In (NYT) Bloodied by a harsh bailout deal that drives a stake through the heart of this Mediterranean country's oversize financial industry, Cyprus now faces a further blow to its role as an offshore tax haven: the vultures from competing countries are circling. With a flood of e-mails and phone calls in recent days to lawyers and accountants here who make a living from helping wealthy Russians and others avoid taxes, competitors in alternative financial centers across Europe and beyond are promoting their own skills at keeping money hidden and safe. In Herbalife Fight, Both Sides Prevail (WSJ) But for the time being, all three investors are in the black, showing that for all the bluster and bravado, timing is everything in financial markets. Mr. Loeb has cashed out the most, whereas the others have made only paper profits. Mr. Loeb's hedge-fund firm, Third Point LLC, has made at least $50 million on its estimated bet of more than $200 million, according to a person familiar with the firm. As of several weeks ago, the firm had largely exited its Herbalife stake, according to people familiar with Third Point. Mr. Icahn has made roughly $25 million in unrealized gains on his about $590 million bet. Mr. Ackman's Pershing Square Capital Management LP has notched more than $200 million, also in paper profits, on a bet of more than $1 billion. Insider Case Against SAC Manager May Be Tough to Prove (Reuters) On Friday, U.S. authorities arrested and charged Michael Steinberg, a 16-year veteran of Cohen's $15 billion SAC Capital Advisors, with insider trading in shares of the technology stocks Dell and Nvidia. The case against Steinberg, 40, is built heavily on the testimony of one of his former colleagues, Jon Horvath, who has admitted to insider trading and is now cooperating with the government. "What they're going to need to prove is that Steinberg got inside information that he knew came from an insider and that he then traded on it," said Marc Greenwald, a former U.S. prosecutor in New York who is now a partner at Quinn Emanuel in New York, and not involved in the case. "It all depends on what Horvath said he said and whether everybody believes him." Princeton alumna, who told female students to get married, defends provocative advice: ‘Find a husband!' (NYDN) "Here's what nobody is telling you," Patton wrote. "Find a husband on campus before you graduate. Yes, I went there." This controversial column, which she described as "little more than honest advice from a Jewish mother," outraged countless readers when it appeared in The Daily Princetonian on Friday and then went viral. "I sincerely feel that too much focus has been placed on encouraging young women only to achieve professionally," Patton told the Daily News. "I think in the back of their heads they all know this but nobody is saying it." Patton decided to write the open letter after speaking at a Women and Leadership conference on campus a few weeks ago. Many said Patton was scolding women for not marrying her youngest son, a junior at Princeton. ("I am the mother of two sons who are both Princetonians," she said. "My older son had the good judgment and great fortune to marry a classmate of his, but he could have married anyone. My younger son is a junior and the universe of women he can marry is limitless. Men regularly marry women who are younger, less intelligent, less educated. It’s amazing how forgiving men can be about a woman’s lack of erudition, if she is exceptionally pretty. Smart women can’t (shouldn’t) marry men who aren’t at least their intellectual equal. As Princeton women, we have almost priced ourselves out of the market. Simply put, there is a very limited population of men who are as smart or smarter than we are. And I say again — you will never again be surrounded by this concentration of men who are worthy of you.") Libor Suits by Bondholders Tossed Over Lack of Damages (Bloomberg) While potential damages were estimated to be in the billions of dollars, the judge ruled the cases must be dismissed because of the inability of litigants that included brokerage Charles Schwab, pension funds and other bondholders to show they were harmed. Buchwald, whose March 29 ruling allowed some commodities-manipulations claims to proceed to a trial, said that, while private plaintiffs must show actual harm, her ruling didn’t impede governments from pursuing antitrust claims tied to attempts to manipulate Libor. Michael Dell Said to Consider Blackstone LBO Only With CEO Guarantee (Bloomberg) In several recent meetings in Austin, Texas, with Chinh Chu and David Johnson -- the Blackstone executives overseeing the firm’s bid -- Michael Dell said he would be more likely to support their proposal if he retained an influential role, a second person familiar with the talks said. Negotiations are ongoing and the two sides may not reach an understanding. Argentina sticks to its guns on debt payout (NYP) The country, in a filing late Friday, refused to follow a court order that mandated it give equal treatment to a group of holdout bondholders led by billionaire hedge fund manager Paul Singer and his Elliott Management. Instead, Kirchner offered the group, owed $1.44 billion, the same deal it offered exchange bondholders in 2010. Pregnant woman's leg amputated after being hit with car (KHOU) The incident happened in the 9600 block of Ravensworth Drive, where Kelly, 21, lives with her boyfriend, Christopher Chaney. Chaney said his ex-girlfriend, 26-year-old Shareyll Hunter, showed up at the house Thursday morning and started arguing with Kelly. "I was in my house asleep, and then one of my kids’ mothers came," Chaney said. "I mean, they been texting and talking over the phone saying they want to fight each other and meet up right here and do it." All of the commotion outside roused Chaney from bed. "When I came outside, I seen my kids’ mother punching on the window and she wanted to fight the other one," Chaney said. He said Hunter jumped into his car and gunned it, pinning her 21-year-old rival between the car and the house, police said. Kelly was rushed to the hospital with two broken legs. Doctors had to amputate one leg. The baby is expected to be OK. Hunter drove off in her ex-boyfriend’s four-door Lincoln LS. She remained on the loose at last check. Hunter is five months pregnant and the victim is four months pregnant. Chaney, 26, says he is the father in both cases. Reporter: "You think it [the hit-and-run] is because of you getting them pregnant?" Christopher Chaney: "I mean, I’m handsome."

Opening Bell: 08.17.12

Facebook Investors Cash Out (WSJ) Mr. Zuckerberg has long exhorted employees not to pay attention to the stock price, instead pushing them to focus on developing the social network. But in a companywide meeting earlier this month, he conceded that it may be "painful" to watch as investors continue to retreat from Facebook's stock, according to people familiar with the meeting. Facebook Second-Worst IPO Performer After Share Lock-Up (Bloomberg) Facebook's 6.3 percent drop yesterday, after the end of restrictions on share sales by its biggest investors, was the second-largest post-lock-up decline among companies that have gone public since January 2011. Wall Street Bonus Estimates Cut By Pay Consultant Johnson (Bloomberg) Incentive pay for senior management, excluding the executives named on proxy filings, will be unchanged to 10 percent higher, Johnson Associates estimated in an Aug. 14 report. That’s down from May, when the firm predicted senior managers would get bonus boosts of 5 percent to 15 percent. The biggest increases are still likely to come in fixed- income and is now forecast to be 10 percent to 20 percent instead of 15 percent to 25 percent, the new report showed. “They had a terrible 2011, so it’s off of a low base,” Johnson said. “We hoped that that business would have recovered more dramatically, but it hasn’t, so I guess you’d say it’s gone from terrible to so-so.” Executives Say Obama Better For World Economy (Reuters) Twice as many business executives around the world say the global economy will prosper better with President Barack Obama than with Mitt Romney, according to a poll out Friday. Democrat Obama was chosen by 42.7 percent in the 1,700-respondent poll, compared with 20.5 percent for Romney. The rest said "neither." 'Broken' Fund Shifts Blame (WSJ) Nearly four years after the collapse of Lehman Brothers Holdings Inc. "broke the buck" at his money-market mutual fund, Bruce R. Bent is blaming the U.S. government. The 75-year-old Mr. Bent and his son, Bruce Bent II, are set to go on trial in October on civil charges of misleading investors, ratings firms and trustees of the Reserve Primary fund as it wobbled in September 2008. The Securities and Exchange Commission alleges that the two men falsely claimed they would prop up the fund's $1 net asset value even though they "secretly harbored" doubts. The two Bents have denied the allegations in the SEC's civil lawsuit ever since it was filed in U.S. District Court for the Southern District of New York in 2009. Former Spitzer call girl Ashley Dupre is engaged and pregnant (NYP) “On the record, yes, I can confirm I’m almost seven months,” Dupre, 27, enthused when contacted yesterday. “I can’t tell you when the wedding date is just yet.” In four short years, Dupre’s gone from Client No. 9 to Husband No. 1, and now owns Femme by Ashley, a lingerie and swimwear shop in Red Bank, NJ, which she her husband to be, New Jersey asphalt scion Thomas “TJ” Earle, helped her open in May. Ex-MS Banker In China Bribery Case (CNBC) Garth Peterson joined Morgan Stanley in Asia in 2002, just as the Chinese real estate market was taking off. His job would be making real estate deals for the firm, and Peterson seemed the ideal person for the position. A blonde, blue-eyed American raised in Singapore, Peterson — then in his early 30s — was fluent in Mandarin, and in the local culture. “The language is, you know, essential, I would say, being able to speak Mandarin well,” Peterson said. “But beyond that, I worked in the Chinese real estate industry since 1993.” In 2006 alone, according to news reports at the time, Morgan Stanley invested $3 billion in Chinese real estate. Peterson, by then a vice president, was at the forefront. “I was given more and more support, and the business just grew exponentially,” he said. Today, his fortunes have drastically changed. On Thursday, Peterson was sentenced to 9 months in prison and 3 years supervised release after pleading guilty to evading Morgan Stanley’s internal controls — a federal offense. Prosecutors said he engineered a deal that transferred Morgan Stanley’s interest in a multi-million dollar Shanghai real estate development to a shell company secretly controlled by Peterson and a Chinese government official. The official, who was not identified, made an instant paper profit of $2.5 million. Treasury To Amend Terms Of Fannie, Freddie Bailout (WSJ) Under the new arrangement between Treasury and the companies' federal regulator, all the firms' quarterly profits would be turned over to the government as a dividend payment; the government wouldn't require such payments in periods when the firms are unprofitable. Backstop For Futures Trades (WSJ) Support is growing for an insurance fund that would protect customers of futures brokerages that collapse. While numerous hurdles remain, the process took an important step Thursday when futures-exchange operator CME Group met with other industry officials and a customer-advocacy group in Chicago to discuss how to set up a customer-protection fund. It could take months or even longer for a specific plan to emerge, but participants in the meeting said it is increasingly likely that the government, futures industry or both will propose such an insurance fund. "Restoring customer confidence is very important," and "we're looking at all potential solutions, including an insurance fund," said Walt Lukken, president of the Futures Industry Association, a trade group.

Opening Bell: 03.12.13

Apple To Announce Plans For Cash Hoard (WSJ) Apple will outline what it plans to do with a growing pile of cash by next month, according to Howard Ward, chief investment officer at Gamco Investors Inc. Apple, which has been grappling with investor criticism over the handling of its $137.1 billion in cash and investments, will add $42 billion in earnings to that sum in 2013, Ward said. Greenlight Capital Inc.’s David Einhorn has been urging Cupertino, California-based Apple to issue high-yielding preferred shares to spread the funds among investors. Investors are also urging Apple to consider a higher dividend payout. “We’re going to get an announcement from the company as to how they intend to reallocate some of their cash,” Ward said in an interview today on Bloomberg Radio’s “Surveillance” with Tom Keene. “They will put a floor under their stock at a higher price than it is today.” AIG shareholders win class-action status in lawsuit versus U.S. (Reuters) Two groups of American International Group shareholders won class-action status from a federal judge on Monday in a $25 billion lawsuit by former Chief Executive Maurice "Hank" Greenberg over alleged losses caused by the U.S. government's bailout of the insurer. U.S. Court of Federal Claims Judge Thomas Wheeler also appointed Greenberg's lawyer, David Boies, of Boies, Schiller & Flexner LLP, as lead counsel for the classes. Greenberg's Starr International Co, once AIG's largest shareholder with a 12 percent stake, sued the United States in 2011 over what eventually became a $182.3 billion bailout for the New York-based insurer. It said that by taking a 79.9 percent AIG stake and then conducting a reverse stock split without letting existing shareholders vote, the government conducted an illegal taking that violated the 5th Amendment of the U.S. Constitution. Citing Boies' estimate that "tens of thousands" of shareholders might be affected, Wheeler said "class certification is by far the most efficient method of adjudicating these claims." Both Sides Of SEC Nominee Face Heat (WSJ) In one version, Ms. White is a no-holds-barred crime fighter known for stretching the law to jail mob bosses and international terrorists. In another, Ms. White is a friend of Wall Street who worked for the past decade for the law firm Debevoise & Plimpton LLP, where she represented giant banks such as J.P. Morgan Chase. Blackstone: We're Betting Big On Residential Real Estate (CNBC) "Blackstone is now the largest owner of individual houses in the United States," Schwarzman told CNBC's "Squawk on the Street" Monday, pointing to his company's $3 billion portfolio of residential real estate. But given the nascent recovery in the housing market, they're not buying and selling them quickly but rather renting them out. "It's a good business for us. It's a new thing, but it's also good for America," he said. Icahn Gets Confidential Look At Feds Books (Reuters) Dell Inc has agreed to give Carl Icahn a closer look at its books, less than a week after the activist investor joined a growing chorus of opposition to founder Michael Dell's plan to take the world's No. 3 personal computer maker private...A source with knowledge of the situation said Icahn's and Dell's confidentiality agreement does not have a contractual "standstill" obligation - meaning he is not obligated to stop trading stock in the company. But the activist investor would not be able to trade the stock while he is privy to non-public information in any case, the source added. Phoenix society gives gator happier life with prosthesis (AZC) The alligator is Mr. Stubbs, who is part science project, part human endeavor, and much more. He’s also half-gator, half-rubber. The 11-year-old crocodilian now sports a 3-foot-long prosthetic tail, attached firmly with nylon straps. It replaces the original, which was bitten off more than eight years ago. As far as anyone at the Phoenix Herpetological Society knows, Mr. Stubbs is the first alligator to tolerate, if not sport, a prosthesis. It will take months, however, before Mr. Stubbs learns how to properly use the tail. For now, handlers are happy with smaller milestones. “The fact he doesn’t try to bite it (the tail) is a good sign,” said Russ Johnson, president of the Phoenix Herpetological Society. “Learning how to use it is going to take a lot of training.” The months-long project was overseen by someone well-versed in anatomy. Marc Jacofsky is executive vice president of research and development at the CORE Institute in Phoenix, which specializes in orthopedic care — for humans. While visiting the Herpetological Society, Jacofsky was asked if it would be possible to make an artificial tail for Mr. Stubbs. “I looked and saw there was enough there that we could probably do something that wouldn’t involve surgery,” Jacofsky said. “I also liked the idea because it would improve his life. Our motto at the CORE Institute is ‘Keep life in motion,’ and this certainly fit in with that. I was on board.” Jacofsky estimated the project has cost the Core Institute about $6,000 in donated labor and materials. Mr. Stubbs had been a project since shortly after arriving at the center in May 2005. The then-3-year-old gator was one of 32 confiscated from the back of a truck pulled over near Casa Grande, Johnson said. Officers called in the Arizona Game and Fish Department as soon as the cargo made its presence known. “Scared the heck out of the officer,” Johnson said. “No one expects to find alligators when you look into the back of a truck.” Greece Faces 150,000 Job-Cut Hurdle to Aid Payment (Bloomberg) Greece is locked in talks with international creditors in Athens about shrinking the government workforce by enough to keep bailout payments flowing. Identifying redundant positions and putting in place a system that will lead to mandatory exits for about 150,000 civil servants by 2015 is a so-called milestone that will determine whether the country gets a 2.8 billion-euro ($3.6 billion) aid instalment due this month. More than a week of talks on that has so far failed to clinch an agreement. Failed Sale Of Gleacher Is A Warning For Directors (WSJ) The Dell drama is still unfolding, but for a cautionary tale of how boards, even when they may be well-intentioned, can harm investors of a takeover target, take Gleacher. Shares in the small investment bank have lost more than 60% in the past year as the prospects for a deal evaporated, business dwindled and star traders left. Ironically for a firm that bears the name of Eric Gleacher, who made his name advising on big deals in the 1980s, the company failed to sell itself. At least as some critics see it, its independent directors are to blame. SEC Says Illinois Hid Pension Troubles (WSJ) For years, Illinois officials misled investors and shortchanged the state pension system, leaving future generations of taxpayers to foot the bill, U.S. securities regulators allege. The Securities and Exchange Commission on Monday charged Illinois with securities fraud, marking only the second time the agency has filed civil-fraud charges against a state. Bernanke Provokes Mystery Over Fed Stimulus Exit (Bloomberg) When Ben S. Bernanke asserted last month that the Federal Reserve doesn’t ever have to sell assets, he raised questions about how the central bank can withdraw its record monetary stimulus without stoking inflation. The Fed may decide to hold the bonds on its balance sheet to maturity as part of a review of the exit strategy Bernanke expects will be done “sometime soon,” he told lawmakers in Washington on Feb. 27. This would help address concerns that dumping assets on the market will lead to a rapid rise in borrowing costs. It also allows the Fed to avoid realizing losses on its bond holdings as interest rates climb. Man shot in buttocks at Calle Ocho Festival unaware he was wounded (Miami Herald) The shooting occurred around 4:30 p.m. as the man walked along Southwest Eighth Street and 11th Avenue, part of the throng of revelers who gather annually at the street festival in Little Havana. It’s unclear if something sparked the violence between the two men, or if the shooting was unprovoked. At first the victim did not realize he had been shot and kept strolling along the festival route. “He discovered later that he was bleeding and then passed out,” said Miami police spokesman Sgt. Freddie Cruz. The victim, who was hit in the left buttocks, was taken to Jackson Memorial Hospital, where he is in stable condition and expected to recover.

Opening Bell: 05.31.12

At Core Of Greek Chaos, A Reviled Tax (WSJ) So despised is the property tax that its critics—which is to say, most of Greece—refer to it as the haratsi, after a per capita tax imposed by the occupying Ottomans. About three-quarters of Greece's households own their homes. Like many other European countries, Greece already has some property taxes. But those have been aimed mostly at higher-value properties and raised little revenue. JPMorgan To Spin Out 'Special Investments' (FT) The unit, whose investments include LightSquared, the wireless internet provider, will be moved to the bank’s corporate division and prevented from seeking fresh investment opportunities, bankers were told on Wednesday. Woman Who Wouldn't Be Intimidated By Citigroup Wins $31 Million (Bloomberg Markets) Sherry Hunt never expected to be a senior manager at a Wall Street bank. She was a country girl, raised in rural Michigan by a dad who taught her to fish and a mom who showed her how to find wild mushrooms. She listened to Marty Robbins and Buck Owens on the radio and came to believe that God has a bigger plan, that everything happens for a reason. She got married at 16 and didn’t go to college. After she had her first child at 17, she needed a job. A friend helped her find one in 1975, processing home loans at a small bank in Alaska. Sherry Hunt never expected to be a senior manager at a Wall Street bank. She was a country girl, raised in rural Michigan by a dad who taught her to fish and a mom who showed her how to find wild mushrooms. She listened to Marty Robbins and Buck Owens on the radio and came to believe that God has a bigger plan, that everything happens for a reason. She got married at 16 and didn’t go to college. After she had her first child at 17, she needed a job. A friend helped her find one in 1975, processing home loans at a small bank in Alaska...In March 2011, more than two years after Citigroup took $45 billion in bailouts from the U.S. government and billions more from the Federal Reserve -- more in total than any other U.S. bank -- Jeffery Polkinghorne, an O’Fallon executive in charge of loan quality, asked Hunt and a colleague to stay in a conference room after a meeting. The encounter with Polkinghorne was brief and tense, Hunt says. The number of loans classified as defective would have to fall, he told them, or it would be “your asses on the line.” Hunt says it was clear what Polkinghorne was asking -- and she wanted no part of it. Jobless Claims Increased Last Week (Bloomberg) First-time claims for jobless benefits increased by 10,000 to 383,000 in the week ended May 26 from a revised 373,000 the prior week, the Labor Department said today. The initial claims exceeded the median estimate of 370,000 in a Bloomberg News survey of economists. The number of people on unemployment benefit rolls dropped. For French CEO's, Politics Means Big Pay Cuts (WSJ) Top managers at France's state-owned companies are expected to face significant pay cuts next month, when Socialist President François Hollande plans to begin enforcing salary caps as part of his broader electoral pledge to get tough on the rich. During the presidential campaign, Mr. Hollande vowed to curb "excessive" remunerations at France's 52 state-controlled or partially state-owned companies by ordering that executive pay not exceed 20 times the salary of the lowest-ranking employees. New York Plans to Ban Sale of Big Sizes of Sugary Drinks (NYT) The proposed ban would affect virtually the entire menu of popular sugary drinks found in delis, fast-food franchises and even sports arenas, from energy drinks to pre-sweetened iced teas. The sale of any cup or bottle of sweetened drink larger than 16 fluid ounces — about the size of a medium coffee, and smaller than a common soda bottle — would be prohibited under the first-in-the-nation plan, which could take effect as soon as next March. Gorman, Greifeld ‘Face’ off (NYP) Morgan Stanley is prepared to take Nasdaq to court to recoup money it believes it lost in the flubbed Facebook initial public offering. CEO James Gorman’s investment bank, which led the now-notorious, snafu-ridden Facebook IPO, believes Bob Greifeld’s Nasdaq owes it roughly $10 million, sources said. The investment bank, which quarterbacked the $16 billion Facebook offering, had to shell out to clients a seven-figure sum to resolve a litany of Nasdaq trading glitches. Morgan Stanley's Facebook Analyst: Sober Man in World of Hype (Reuters) Scott Devitt was one of a number of analysts to lower his revenue and earnings expectations for the social media giant after the company informed analysts that it was dropping its quarterly and annual revenue guidance. Facebook also issued an amended prospectus cautioning that the shift of its users to mobile platforms could have a negative impact on revenue growth. Such a move was highly unusual because it occurred just days before Facebook's highly anticipated IPO, whose lead underwriter was Morgan Stanley, Devitt's employer. The investment bank not only had control over the process, but over 38 percent of Facebook shares being sold. Devitt's and other analysts' revised revenue forecasts were shared via phone calls with institutional investors, but not with retail investors, before the stock began trading publicly. That in turn raised questions over whether the playing field was skewed against Main Street investors from the start and sparked lawsuits. Citigroup Debt Viewed As Risky (WSJ) Gimme Credit, a fixed-income research company based in New York, said it expects debt issued by the third-biggest U.S. bank by assets to perform less well over the next six months than bonds issued by the company's peers. Russian Zuckerberg Throws Money Paper Planes At Passersby (MSN) Russian millionaire Pavel Durov reportedly spent last weekend flying paper airplanes made from 5,000-ruble notes (equal to about $160) out the window of his office in St. Petersburg. The 27-year-old gave away around $2,000 before he stopped because "people turned into animals" grabbing the cash. Durov is the CEO of Russia's largest social network Vkontakte, which sort of makes him the Russki Mark Zuckerberg. Scarf-Wearing Pig Stuns Motorists (UPI) Pennsylvania State Police said a baby pig wearing a scarf crossed rush hour traffic in Pittsburgh and disappeared into the woods. Police said the fashionable swine was spotted crossing the inbound lanes of Parkway West near the Green Tree exit around 8:30 a.m. Wednesday, and many motorists pulled off the parkway and stopped to take pictures of the unusual pedestrian. Troopers said the pig had crossed over a guardrail and into the woods by the time they arrived, and they were unable to locate the animal.

Opening Bell: 08.20.12

Diamond Censured Over Evidence in Barclays Libor Probe (Bloomberg) Barclays ex-Chief Executive Officer Robert Diamond was criticized for giving “unforthcoming and highly selective” evidence by a U.K. parliamentary report that faulted the bank for letting traders rig interest rates. The “candor and frankness” of Diamond’s testimony to lawmakers on July 4 “fell well short of the standard that Parliament expects,” the House of Commons Treasury Committee said in a 122-page report today following its inquiry into the bank’s attempts to manipulate the London interbank offered rate. “The Barclays board has presided over a deeply flawed culture,” the panel of British lawmakers said. “Senior management should have known earlier and acted earlier.” Bob Diamond Hits Bank In Rate-Rigging Row (Telegraph) In a statement Mr Diamond hit back at the report. "I am disappointed by, and strongly disagree with, several statements by the Treasury Select Committee,” Diamond said. Deutsche Bank’s Business With Sanctioned Nations Under Scrutiny (NYT) Federal and state prosecutors are investigating Deutsche Bank and several other global banks over accusations that they funneled billions of dollars through their American branches for Iran, Sudan and other sanctioned nations, according to law enforcement officials with knowledge of the cases. JPMorgan Picks Leader For 'Whale' Probe (WSJ) JPMorgan directors have named Lee Raymond chairman of a board committee investigating the bank's multibillion-dollar trading blunder, said people close to the probe. Some Groupon Investors Give Up (WSJ) Some of the early backers of Groupon, including Silicon Valley veteran Marc Andreessen, are heading for the exits, joining investors who have lost faith in companies that had been expected to drive a new Internet boom. At least four Groupon investors who held stock in the daily-deals company before it went public have sold or significantly pared back their holdings in recent months. Since its initial public offering in November, Groupon has shed more than three-quarters of its stock-market value, or about $10 billion...Mr. Andreessen, who rode the 1990s dot-com frenzy to riches at Netscape Communications Corp., was among the investors who helped fuel Groupon's rapid ascent. His firm, Andreessen Horowitz, was responsible for $40 million of the $950 million investors put into Groupon just months before the company's IPO. Andreessen Horowitz sold its 5.1 million Groupon shares shortly after restrictions on selling the stock expired June 1, according to people with knowledge of the transaction. Facebook Investors Brace For More Shares Coming To Market (Bloomberg) While Facebook Chief Executive Officer Mark Zuckerberg operates the world’s largest social-networking service, he’s facing investor concerns about how it can generate more revenue from its growing user base. That, plus the end of the first lock-up, drove the shares to half the offering price of $38, wiping out almost $46 billion in market value. Queen's corgis 'attack' Princess Beatrice's terrier Max (Telegraph) They may be among the Queen's favourite subjects but her corgis are in the doghouse after getting into a fight with one of Princess Beatrice's pets. Max, an 11–year–old Norfolk terrier, is said to have been badly injured after a "nasty" encounter at Balmoral castle last week. The Princess's pet nearly lost an ear and suffered several bloody bite injuries that had to be treated by a vet, in the latest in a series of scraps between royal dogs..."The Queen's dog boy was taking the corgis for a walk and they were joined by the Norfolk terriers, which came with Prince Andrew," one insider told a Sunday newspaper. "They were being taken along the long corridor leading to the Tower Door before being let into the grounds for a walk, and they all became overexcited. They began fighting among themselves and unfortunately the dog boy lost control. "The next thing we knew there were horrific yelps and screams...there was blood everywhere." EU Leaders Plan Shuttle Talks To Bolster Greece, Sovereign Bonds (Bloomberg) The sovereign-debt crisis mustn’t become a “bottomless pit” for Germany, even though Europe’s biggest economy would pay the highest price in a breakup of the euro region, German Finance Minister Wolfgang Schaeuble said on Aug. 18 during his ministry’s open day in Berlin. “There are limits,” he said, as he ruled out another aid program for Greece. Hedge 'A-Listers' Include Ackman, Loeb, Chanos (NYP) Influential adviser Cliffwater LLC — which monitors some 1,500 hedge funds and ranks them with an A, B or C grade — keeps a closely guarded list of 90 or so top-rated funds...Cliffwater advises large pension funds in New Jersey, Wisconsin and Massachusetts, among others, and has become one of the industry’s hottest gatekeepers as more big institutions invest directly in hedge funds rather than through funds of funds...An August copy of Cliffwater’s “500 top-rated A or B” funds shows that the company gives high marks to activist funds such as Ackman’s Pershing Square and also to tail risk funds, which aim to protect against disasters. Tucked inside the protected internal document, which compares five-year historical returns to risk, is Cliffwater’s “Select List,” which appears to be the 95 funds deemed worthy of A ratings. Along with Ackman, Dan Loeb of Third Point, the hedgie who recently rattled Yahoo!, famed short-seller Jim Chanos of Kynikos Associates and gold hound James Melcher of Balestra Capital, made the short list as well. Spitzer Defends Wall Street Legacy (FT) Last week it emerged that Goldman Sachs had brought the curtains down on its Hudson Street platform, one of the most high-profile independent research projects started by an investment bank involved in the settlement. Other settlement banks, such as UBS and Bank of America Merrill Lynch, are said to have closed or scaled down their own independent analysis projects. Mr. Spitzer was quick to defend the legacy of the global settlement in an interview with the Financial Times. “I think we accomplished something,” Mr. Spitzer said. “There are a lot of independent research firms out there, some doing well and others not. Goldman has other business models and other priorities.” Shia LaBeouf To Have Sex "For Real" While Filming Scenes For Lars Von Trier's "Nymphomaniac" (Complex) "It is what you think it is. There's a disclaimer at the top of the script that basically says, we're doing [the sex] for real. And anything that is 'illegal' will be shot in blurred images. But other than that, everything is happening," LaBeouf said during an interview.