Opening Bell: 10.27.17

SEC has had enough of that whole enforcement thing; no one really wants to get rid of Libor; meet the winner of the HR violation sweepstakes; and more.
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SEC Signals Pullback From Prosecutorial Approach to Enforcement (WSJ)
Steven Peikin, co-director of the SEC’s enforcement division, indicated the regulator would drop the “broken windows” strategy of pursuing many cases over even the smallest legal violations, and may also pull back from trying to make some companies admit to wrongdoing as a condition of settling with the SEC.

As Trump tax comes to floor, failure could spell stocks selloff (Reuters)
“The nature of the rally over the last two months has been tax-cut led. If we don’t get a cut then the market is going down” several percentage points, said Edward Perkin, chief equity investment officer at Eaton Vance. A collapse in the tax measure would likely send the S&P 500 down 5 percent or more, Goldman Sachs said in an Oct. 20 note. “Tax reform will determine the direction of the S&P 500’s next 100 points,” the report said.

A CVS-Aetna Deal Is Logical But Also a Stretch (BBG Gadfly)
CVS Health Corp. is reportedly considering a blockbuster buyout of health insurer Aetna Inc. There is a sort of reverse precedent for such a tie-up, with an insurer buying a pharmacy benefit manager (PBM). But there's never been a deal like this, where a company with no experience operating a major insurer would suddenly run one of the country's largest.

Phase Out Libor? Not So Fast, Bankers Say (WSJ)
Nearly 80% of market participants believe the London interbank offered rate should continue to be used as a financial benchmark if the way it’s calculated changes, according to a Bank of America Merrill Lynch survey of 164 asset managers and others who work at financial institutions. Though regulators are ratcheting up efforts to find alternative benchmarks, 73% of survey respondents said Libor should continue to exist alongside any new reference rates.

How to Profit From Behavioral Economics (Businessweek)
The professional investors at Fuller & Thaler also use systems to guard against their biases. They don’t visit companies, says Giovinazzo—because when you meet with people, you judge them more on whether you like them than whether they’re good leaders. To avoid anchoring, he and his colleagues at Fuller & Thaler don’t set price targets for stocks or make quarterly earnings forecasts. It’s good to know that markets can be irrational, but it can only help if you recognize that you’ll be, too.

This Robot Will Handle Your Divorce Free of Charge (WSJ) “I think people get caught up in trying to make money,” says Browder, 19. “I’m just trying to make the law free for everyone.” A computer-science major at Stanford who finds class “just so boring,” Browder is now out to democratize a new institution: divorce. About 95% of divorces are uncontested, which can cost up to $10,000, the bulk of which is for attorney fees. Starting in February, DoNotPay will generate all the documents necessary to file for divorce, without involving lawyers. All you need is to get your partner to sign.

Joseph Tsai agrees to purchase 49 percent minority stake in Nets, sources say (ESPN)
Joseph Tsai, the executive vice chairman and co-founder of Chinese e-commerce goliath Alibaba, has reached an agreement in principle to purchase a 49 percent minority stake in the Brooklyn Nets that includes the option to acquire controlling interest of the NBA franchise in several years, league sources told ESPN. The purchase price will be based upon a $2.3 billion valuation of the team, league sources said.

About that Great Moderation (Tesari)
To the extent there was a Great Moderation, it purchased lower volatility for a marked worsening in skew. In essence, to take analogy from ecology: in curbing brush fires policymakers have created greater potential for forest fires.

Exec is accused of violating every HR policy ever (NYP)
He often appeared drunk and high on cocaine at work and she once snapped a photo of him passed out on the floor, McIlraith says in the complaint. “At times, he has passed out in the office,” the complaint says, above a photograph that purportedly shows Legg sprawled out on the carpet. She also took photos of a sign Legg allegedly posted outside his office that read, “Suck my balls,” and a photo of an ejaculating penis that he’d allegedly drawn.

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Opening Bell: 01.08.13

Obama Said Close to Choosing Lew for Treasury Secretary (Bloomberg) President Barack Obama may choose White House Chief of Staff Jack Lew to replace Treasury Secretary Timothy F. Geithner as soon as this week, according to two people familiar with the matter. The selection of Lew would trigger a White House shuffle for Obama’s second term as he replaces his chief of staff and moves senior aides into new roles, said the people, who requested anonymity to discuss personnel matters. While Obama hasn’t made a final decision to pick Lew, the president’s staff has been instructed to prepare for his nomination, said one of the people. Rescued by a Bailout, AIG May Sue Its Savior (NYT) The board of A.I.G. will meet on Wednesday to consider joining a $25 billion shareholder lawsuit against the government, court records show. The lawsuit does not argue that government help was not needed. It contends that the onerous nature of the rescue — the taking of what became a 92 percent stake in the company, the deal's high interest rates and the funneling of billions to the insurer's Wall Street clients — deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for "public use, without just compensation." Greenberg: 'Cadre' Hurt AIG (NYP) Maurice “Hank” Greenberg, former chief executive officer of American International Group, says in a soon-to-be-published book that the company was almost destroyed by overzealous overseers. The insurer was “ultimately taken over and run aground by a cadre of auditors, lawyers, outside directors, and government officials,” according to an excerpt of “The AIG Story” on Amazon.com’s website. JPMorgan’s Staley Quits to Join BlueMountain Hedge Fund (Bloomberg) ames E. Staley, the JPMorgan Chase executive who was once seen as a possible candidate to become chief executive officer, quit to join BlueMountain Capital Management LLC, a $12 billion hedge fund with close ties to the New York bank. Staley, who was at JPMorgan for more than 34 years, most recently as chairman of the corporate and investment bank, will become a managing partner and purchase a stake in BlueMountain, the New York-based firm said today in a statement. Proceeds from the stake sale will be invested in new infrastructure, technology and people, the firm said. “I’m very excited to be joining BlueMountain at a time when sea changes in the financial industry combined with the firm’s unique strengths open up enormous possibilities to deliver value to clients,” Staley, 56, said in the statement. HSBC N.J. Client Admits Conspiracy in Offshore Tax Case (Bloomberg) A New Jersey client of HSBC Holdings pleaded guilty to charges that he hid as much as $4.7 million through Swiss and Indian accounts not declared to the U.S. Internal Revenue Service. Sanjay Sethi, 52, who owns SanVision Technology Inc., conspired with HSBC bankers in New York, London and Geneva to hide assets from the IRS, he admitted yesterday in federal court in Newark, New Jersey. Sethi will pay a $2.37 million penalty for failing to file reports required for foreign accounts. “Sethi and his co-conspirators used nominee and shell companies formed in tax-haven jurisdictions and elsewhere to conceal the defendant’s ownership and control of assets and income from the IRS,” according to his charging document. Bill Ackman Says Just Getting Started Exposing Herbalife (Bloomberg) “We’re prepared to spend whatever it costs and do whatever is required to make sure that the world understands the facts about this company,” he said in a telephone interview. “We can’t imagine how the SEC or the Federal Trade Commission or any other relevant regulator will ignore what we have said.” Ackman said he would make all his information available to U.S. regulators. Chinese Tech Titans Eye Brazil (WSJ) The Chinese like emerging markets because, for a change, they don't have to start way behind established American companies. By moving into Brazil aggressively, Chinese PC maker Lenovo Group and Internet-search company Baidu hope to gain an edge over companies like Hewlett-Packard and Google In addition, some U.S. companies that are leaders at home and in Europe have a smaller footprint here because of Brazil's long history of protectionism and red tape and its high cost of labor, particularly compared with Asia. Oregon brewer Daniel Keeton creates nutritional, non-alcoholic brew for his dog (NYDN) Oregon man Daniel Keeton enjoys serving beer to customers at the brewery he works for, so why shouldn't he serve up some healthy brew for the dog he cares about? The dog brew is non-alcoholic of course, but it is a big hit with Keeton's canine Lola Jane. And now Keeton's special brew is available to anyone who wants it. After years of planning, Keeton launched his company Dawg Grog over the summer. Keeton, who works at Boneyard Brewery in Bend, says Dawg Grog is good for the dogs, and they can't seem to get enough of it. "Bend is a dog-loving community and a beer-loving community," Keeton told the Daily News on Monday. "I wanted to marry those two together in some way." Keeton spent years refining the ingredients to his special brew, which includes low-sodium vegetable broth, water and spent grain from Boneyard Brewery. "After a couple of years of trying recipes I came up with one that I am really happy with, and one that my dog is really happy with," he said. Secret Goldman Team Sidesteps Volcker After Blankfein Vow (Bloomberg) MSI wagers about $1 billion of the New York-based firm’s own funds on the stocks and bonds of companies, including a mortgage servicer and a cement producer, according to interviews with more than 20 people who worked for and with the group, some as recently as last year. The unit, headed by two 1999 Princeton University classmates, has no clients, the people said...The team of about a dozen people, based at the firm’s Manhattan headquarters, is headed by Daniel Oneglia and Geoff Adamson. Oneglia was treasurer of the Princeton eating club Tiger Inn, where his nicknames included “the Don” and “the Weasel,” according to the university’s website. Adamson was coxswain for men’s heavyweight varsity crew. A Boston Globe photo shows teammates flinging him into a Massachusetts lake after a victory. Carlyle Bags $4 Billion Profit From China Insurance Exit (Reuters) Private equity firm Carlyle Group sold its remaining stake in China's No.3 insurer CPIC in a deal valued at $793 million, exiting the business with its largest dollar profit on an investment. After several stake sales in the past two years, Carlyle will finish with a total profit of more than $4 billion, five times the $800 million it invested in CPIC between 2005 and 2007 for a 17 percent stake, Thomson Reuters calculations show. By private equity standards, where making two times cash paid and a few hundred million is considered a success, the CPIC exit is an historic deal for Carlyle. London Quantitative Hedge Funds Report Second Year of Losses (Bloomberg) The performance of the funds belies their popularity with investors, who’ve poured $108.2 billion into the pools since the end of 2008, according to Fairfield, Iowa-based BarclayHedge Ltd. While quants made money during the financial crisis when other hedge funds didn’t, they’ve since stumbled as market sentiment swung from optimism to pessimism following political announcements in Washington and Brussels, breaking up the trends they try to follow. That may force investors to withdraw money. Japan Executives Warn Yen May Get Too Weak (WSJ) The executives, who gathered at an annual New Year's reception held by Japan's three biggest corporate lobbies, praised Prime Minister Shinzo Abe's new government for its proposals to boost the economy and tame the strong yen, which erodes exporters' profits and makes it harder to sell Japan-made goods overseas. But they also cautioned that if the economy stays weak, or if the government doesn't take steps to get its bloated finances under control, investors could lose confidence in Japan and flee, sending the yen into free fall. KFC diner stumbles upon strange brain-like organ in his meal (TS) Disgusted Ibrahim Langoo was tucking into a Gladiator box meal when he spotted what he thought was a “wrinkled brain” inside a piece of chicken. KFC have apologised and, after having the photographs analysed, reckon the unsightly organ may in fact be a kidney. The 19-year-old took a photograph of the three-inch stomach-churning discovery on his mobile phone and complained to staff. Apologetic bosses at the fast-food chain – known for its Finger Lickin’ Good slogan – have now offered him vouchers for even more KFC meals.

Opening Bell: 01.03.13

Fresh Budget Fights Brewing (WSJ) If Congress doesn't do more in the coming months, Moody's warned, the company could follow Standard & Poor's in downgrading U.S. debt. "Further measures that bring about a downward debt trajectory over the medium term are likely to be needed to support the AAA rating," Moody's said Wednesday. But the battles on how to do that are far from over. Republicans say any further deficit reduction or legislation to avoid across-the-board spending cuts should come from reducing spending. President Obama and many Democrats advocate a combination of tax increases and spending cuts. The most serious skirmish will arrive toward the end of February, when the U.S. Treasury is expected to be unable to pay all the government's bills unless Congress boosts the federal borrowing limit. Then on March 1, the across-the-board spending cuts of the fiscal cliff, deferred in this week's deal, are scheduled to begin slicing into military and domestic programs. And on March 27, a government shutdown looms unless Congress approves funding for government operations for the remainder of the fiscal year, which ends Sept. 30. CEOs Pan Fiscal Cliff Deal, Vow to Continue Debt Fight (Reuters) "I think this deal's a disaster," said Peter Huntsman, chief executive of chemical producer Huntsman Corp. "We're just living in a fantasy land. We're borrowing more and more money. This did absolutely nothing to address the fundamental issue of the debt cliff." Former Wells Fargo CEO Dick Kovacevich said the agreement confirms that Washington and both parties are totally out of control. "I think it's a joke," Kovacevich said of the deal. "It's stunning to me that after working on this for months and supposedly really getting to work in the last 30 days that this is what you come up with." Obama’s Warning to Boehner Started Road to Budget Plan (Bloomberg) President Barack Obama had a warning for John Boehner at a Dec. 13 White House meeting: Stop opposing higher tax rates for top earners, or the president would dedicate his second term to blaming Republicans for a global recession. The next day, the House speaker called the president and said he was open to a tax-rate increase on annual income of more than $1 million...While the budget deal Obama and Boehner were negotiating fell apart, the speaker’s concession on tax rates ultimately allowed Vice President Joe Biden and Senate Minority Leader Mitch McConnell, a Kentucky Republican, to craft the last-minute plan Congress passed Jan. 1. Nouriel Roubini: US Will Soon 'Get Messy' Again (CNBC) "It won't be long before there is another crisis. Two months, in fact." Pershing to Take 'Passive Shareholder' Role in General Growth (WSJ) Pershing Square Capital Management LP agreed to sell $271.9 million in General Growth Properties warrants to Brookfield Asset Management Inc., as part of a deal between the mall owner's two biggest shareholders that would resolve their recent disputes and see Pershing become a passive shareholder. Brookfield, in turn, offered to sell the warrants, which represent the right to acquire 18.4 million shares of General Growth stock, back to General Growth for the same purchase price. Pershing also agreed to limit its ownership stake in General Growth to no more than 9.9% and intends to become a passive shareholder. Brookfield agreed to limit its ownership in General Growth to 45%. Bank Of Canada won’t discuss melting plastic bills, says national security behind silence (NP) Disclosing details of behind-the-scenes discussions about tales of melting banknotes could endanger national security or international relations, says Canada’s central bank. In response to a formal request from The Canadian Press, the Bank Of Canada released 134 pages of internal records — almost completely blanked out — concerning allegations its new polymer bills melted in the scorching summer sun. The bank began issuing $100 polymer banknotes in late 2011, saying they were harder to counterfeit than paper notes and would last much longer. Unconfirmed reports of cooked currency emerged in July when a Kelowna, B.C., bank teller said she had heard of cases in which several bills had melted together inside a car. Soon after, Mona Billard of Cambridge, Ont., reported that she had returned eight plastic bills in January, after her son stashed his $800 Christmas bonus in a tin can and hid it near a baseboard heater. When he retrieved them the next day to make a deposit, the $100 banknotes had shriveled and melted. Ms. Billard exchanged clean bills for the shrunken, unusable ones. “The leather couch is up against the baseboard heater, it doesn’t melt,” she said. “The kids’ toys are back there, they don’t melt.” The Bank of Canada will reimburse damaged notes, but only if they clear an examination by an Ottawa laboratory. Paulson&Co Added To Abacus Suit Against Goldman (Bloomberg) Paulson & Co. was named as a defendant in a proposed revised lawsuit by ACA Financial Guaranty Corp. against Goldman Sachs over a collateralized debt obligation called Abacus. Paulson conspired with Goldman Sachs to deceive ACA Financial, which provided financial guaranty insurance for the deal, ACA Financial said in papers filed yesterday in Manhattan. Private Sector Added 215,000 Jobs Last Month (WSJ) Economists surveyed by Dow Jones Newswires expected ADP to report a gain of 150,000 private jobs. Preet Bharara and other financial heavyweights opposing Paul Singer's attempt to get Argentina to pay debt (NYP) US Attorney Preet Bharara and BlackRock CEO Larry Fink are among the latest bold-faced names to oppose Singer’s attempt to get Argentina to pay him and others $1.3 billion on defaulted debt. Singer, the hedge fund billionaire who runs Elliott Management, is among the 8 percent of Argentina debtholders who refused to accept a 70 percent haircut following a 2001 default by the embattled South American country. Singer inched closer to winning the epic legal showdown in November when a federal judge ruled Argentina could not pay Fink’s BlackRock or other holders of the reorganized debt without putting money in escrow for Singer’s band of investors. An appeals court slowed Singer’s victory parade but refused to set aside the judge’s order. Now, Bharara, Fink’s $3.67 trillion bond firm and others are urging the appeals court to throw the case out. Basel Becomes Babel as Conflicting Rules Undermine Safety (Bloomberg) While higher capital requirements, curbs on banks trading with their own money and other rules have reduced risk, they have magnified the complexity of supervision, according to two dozen regulators, bankers and analysts interviewed by Bloomberg News. Even if the new regulations can be enforced, they don’t go far enough to ensure safety, said Robert Jenkins, a member of the Bank of England’s financial policy committee. Cops: Woman, 50, Battered Boyfriend, 32, Because Six Came Before Nine (TSG) Jennie Scott, 50, was booked into the Manatee County lockup on a misdemeanor charge stemming from the 11 PM encounter in the Palmetto bedroom of Jilberto Deleon, 32. Scott has dated Deleon “for the last 5 years on and off,” according to a sheriff’s report. Deputies were summoned to Deleon’s home by a witness who heard the couple arguing and saw Scott atop Deleon “punching and scratching him.” She also allegedly struck Deleon with a stick and threatened to hit him with a wrench before the tool was taken from her hand by the witness. When questioned by a cop, Scott explained that she and Deleon “were giving each other oral pleasure in the bedroom” when Deleon “finished first and stopped pleasuring her.” Scott added that she “became upset and they began arguing.” A deputy noted that Scott said that she was also mad at Deleon because she had “heard [him] having sex with another woman over the phone earlier in the day.” Scott struggled with deputies before being placed in a police cruiser, where she kicked a window until being warned that she would be maced unless she stopped.

Opening Bell: 12.04.12

Banks Rediscover Money Management Again As Trading Declines (Bloomberg) Global banks, forced by regulators to reduce their dependence on profits from high-risk trading, have rediscovered the appeal of the mundane business of managing money for clients. Deutsche Bank is now counting on the fund unit it failed to sell to help boost return on equity, a measure of profitability. UBS is paring investment banking as it focuses on overseeing assets for wealthy clients. Goldman Sachs, JPMorgan Chase and Wells Fargo, three of the five biggest U.S. banks, are considering expanding asset- management divisions as they seek to grab market share from fund companies such as Fidelity Investments. “Asset management is a terrific business,” said Ralph Schlosstein, chief executive officer of Evercore Partners Inc., a New York-based boutique investment bank that last month agreed to buy wealth manager Mt. Eden Investment Advisors LLC. “Asset managers earn fees consistently without risking capital. Compare that to other businesses in the financial services.” Hedge Funds Win as Europe Will Pay More for Greek Bonds (Bloomberg) Hedge funds drove up prices for Greek sovereign debt last week after determining that European finance ministers would back off a pledge to pay no more than about 28 percent of face value to retire the nation’s bonds. Money managers correctly wagered that not enough bondholders would participate at that level to get the deal done. That would put at risk bailout funds that Greece needs to stave off economic collapse. Transactions involving Greek bonds “increased by the day” after it became clear that the buyback was going to happen, with hedge funds accounting for most of the purchases, said Zoeb Sachee, the London-based head of European government bond trading at Citigroup Inc. “If all goes according to plan, everybody wins,” Sachee said. “Hedge funds must have bought lower than here. If it isn’t successful, Greece risks default and everybody loses.” GE's Swiss lending unit for sale, UBS to bid (Reuters) General Electric Co wants to sell its Swiss consumer lending business, two sources familiar with the matter said, with UBS one of the parties interested in a deal that could be worth up to 1.5 billion Swiss francs ($1.62 billion). The sources told Reuters that UBS was one of at least two parties who plan to submit bids in an auction process. "GE wants to finalize the sale of GE Money Bank by the end of the first quarter," said one of the sources. Brian Moynihan: 'Fiscal Cliff' Repercussions Could Stretch in 2014 (CNBC) "I'm more concerned about business behavior slowing down than I am about consumer behavior," Moynihan told "Squawk Box." "I think we're in danger if this thing strings out into 2013 that you could start to have problems of what 2014 would look like." Icahn Fails In Oshkosh Tender Offer (WSJ) The activist investor was tendered only a meek 22% of shares in an offer he used essentially as a proxy for whether shareholders would support his board nominees. Icahn, who had pledged to drop the offer and his proxy fight if he didn’t receive at least 25% of shares tendered, says he is indeed dropping the tender offer. Ex-baseball star Lenny Dykstra sentenced in bankruptcy fraud case (Reuters) Lenny Dykstra, the 1980s World Series hero who pleaded guilty earlier this year to bankruptcy fraud, was sentenced on Monday to six months in federal prison and ordered to perform 500 hours of community service. The 49-year-old former ballplayer - who is already serving time in state prison for grand theft auto, lewd conduct and assault with a deadly weapon - was also ordered to pay $200,000 in restitution. In the federal case, Dykstra pleaded guilty in July to bankruptcy fraud and other charges. According to the written plea agreement, he admitted defrauding his creditors by declaring bankruptcy in 2009, then stealing or destroying furnishings, baseball memorabilia and other property from his $18.5 million mansion. Teacher disciplined for receiving foot massages from students (SLT) A Taylorsville Elementary School teacher has returned to his third-grade classroom after being disciplined for violating professional standards after students reported they scratched his back, rubbed his feet and had other inappropriate contact while at school. Granite School District officials found no criminal conduct by elementary teacher Bryan Watts, 53, who has worked at the school since 2004, but the district claims to have taken "appropriate disciplinary action" following complaints about Watts...Granite District police Detective Randall Porter started an investigation into Watts’ conduct Oct. 9 after a mother expressed concern to the district after her daughter reported odd classroom behavior by Watts. "She complained that her daughter [name redacted] told her that Watts asks students to rub his feet and back during ‘movie time,’ that Watts told the class that they should not tell their parents about activities that happen in the classroom, and that Watts scared a student by hitting a hammer on the student’s desk," Porter wrote in his 19-page report...officials also said there were student statements about odd activities, including playing dodgeball in Watts’ classroom. Knight Capital May Go It Alone (NYP) Knight Capital’s board emerged from another meeting yesterday to review dueling takeover offers without making a decision. Both Getco and Virtu Financial have made bids for the Jersey City, NJ-based Knight, which had to be bailed out several months ago after a $460 million trading glitch nearly tanked the firm. “[Knight] can still decide to remain independent. That’s a real possibility,” said one source familiar with the bidding process. Top US Firms Are Cash-Rich Abroad, Cash-Poor At Home (WSJ) With billions of dollars overseas that may never come back, the Securities and Exchange Commission is concerned that companies haven't been presenting investors with an honest appraisal of their liquidity. As a result, regulators are pressing companies to more clearly lay out how much of their cash is in the U.S. and how much is overseas and potentially encumbered by U.S. taxes. UBS Near Libor Deal (Reuters) UBS is nearing a deal to settle claims some of its staff manipulated interest rates, and could reach agreement with US and British authorities by the end of the year, a source said yesterday. Britain’s Barclays was fined $453 million in June for manipulating Libor benchmark interest rates, and remains the only bank to settle in the investigation, which led to the resignation of the bank’s chairman and CEO. Calpers Crusader Takes Aim At Fees (WSJ) Mr. Desrochers, a 65-year-old native of Canada who last year became head of private-equity investing for the California Public Employees' Retirement System, has told buyout funds to reduce fees if they want cash from the $241 billion pension goliath, one of the nation's largest private-equity investors. He has pushed for Calpers to pay management fees below the industry's standard of 1% or more and asked for performance fees below the usual 15% to 20% of gains, according to people who have dealt with him. Mike Tyson: Brad Pitt Had Sex With My Wife (NYP) Mike Tyson claims that he caught Pitt having sex with his ex-wife, Robin Givens, while they were in the middle of their divorce in the late eighties. Tyson, who was shortly married to Givens from 1988 to 1989, said he and the actress were still sleeping with each other during their separation. "I was getting a divorce, but... every day, before I would go to my lawyer's office to say 'she's a pig and stealing,' I would go to her house to have sex with her," Tyson said on the Yahoo! Sports show “In Depth with Graham Bensinger.” "This particular day, someone beat me to the punch. And I guess Brad got there earlier than I did." How did the heavyweight boxer react? "I was mad as hell...You should have saw his face when he saw me," Tyson said.

Opening Bell: 10.04.12

France’s LBO Firms See ‘Death’ From Hollande’s 75% Carry Tax (Bloomberg) Hollande, who released his first annual budget on Sept. 28, plans to tax fund managers’ share of the profit from their investments, known as carried interest, at a rate of as much as 75 percent, part of a wider effort to increase taxes on the wealthy and narrow the country’s deficit. France also plans to as much as double taxes on capital gains and restrict the amount of debt interest payments a company can deduct from its taxable income, a measure that will reduce returns on leveraged buyouts. Facebook Test Turns Users Into Advertisers (FT) Facebook is testing a new product in the US that allows ordinary users to pay to promote their own status updates, marking a shift in the social network’s willingness to charge its users for a core service. The product has potential to generate revenues, analysts said, but could also threaten the organic feel of the site as people pay to market their own social lives. Mark Zuckerberg Confirms: 'I wear the same thing everyday' (DL) "I mean, I wear the same thing every day, right? I mean, it's literally, if you could see my closet," Zuckerberg starts to explain, as Lauer asks if he owns 12 of the same gray t-shirt. "Maybe about 20," Zuckerberg admits, somewhere between discussing the future of Facebook, his daily routine, the iPhone 5, and his wedding to college sweetheart Priscilla Chan last May. The Facebook CEO says that he doesn't really have much in his closet — it's mainly used by his wife, who graduated from medical school at the University of California at San Francisco shortly before their marriage. Instead, Zuckerberg's identical t-shirt collection lives in the one drawer he's allotted. Tiger Global Up 22.4 Percent (Reuters) Tiger Global, one of the world's best-performing hedge funds, ended the third quarter with strong gains, leaving the fund up 22.4 percent for the year, two people familiar with the numbers said on Wednesday. The roughly $6 billion fund, run by Chase Coleman and Feroz Dewan, has been the darling of the investment community for its string of strong returns at a time when the average hedge fund is delivering only low single-digit returns. In 2011, when most funds nursed losses, Tiger Global captured headlines with a 45 percent gain for the year after having made a good chunk of money on the short side, people familiar with the portfolio said. 'Dark Pool' And SEC Settle (WSJ) The Securities and Exchange Commission alleged in its order that Boston-based broker-dealer eBX LLC allowed the third-party operator of its trading platform, called LeveL ATS, to use details on client orders, including the stocks involved and whether they were buy or sell orders, to its own advantage. That operator is Lava Trading, an electronic-trading unit of Citigroup, according to eBX. eBX agreed to pay $800,000 to settle the SEC's allegations. It did so without admitting or denying wrongdoing. Mohamed El-Erian: No corner offices at PIMCO (Fortune) "It doesn't matter whether you're CEO or whether you're an associate, you have the same size office. No corner offices. Just a conference room. And then I knew that I had made the right decision when my very first outing with PIMCO, I had come from the IMF, 15 years working on emerging markets. I had a swagger, I thought I knew what I was talking about. I put forward my view, and this summer intern felt safe enough to get up and say, "You know what? Mohamed is wrong and this is why he's wrong." The fact that PIMCO had created this safe zone where a summer intern could get up and question someone who was supposed to be an expert confirmed to me that I was in the right place." Bank-Friendly U.S. Regulator Shifts Focus to Revamp Reputation (Bloomberg) In a stately hearing room stuffed with senators and bankers, Thomas Curry began his apologies. His agency should have stopped a major bank from helping drug cartels launder cash. The violations went on for years while his agency was overly passive. “I deeply regret we did not act sooner,” he said. Curry had been on the job for just over three months on that day in July, so the mistakes hadn’t been made on his watch. His apologies were less a confession than a signal the new Comptroller of the Currency -- long seen as the most bank- friendly of U.S. regulators -- was changing course. “I’m not interested in what people thought about in the past,” Curry said in an interview. “My focus is going forward.” Since he took over in March, at least two key staff members closely associated with the agency’s pro-industry stance have departed, notably chief counsel Julie Williams. Williams, a 19- year OCC veteran, was known for helping nationally chartered banks resist state regulation by arguing they were preempted by often less-stringent federal rules. Curry has also raised the profile of consumer protection and shifted focus toward “operational risk” -- the idea that bank practices and management can pose as much of a threat to safety and soundness as external forces. Argentine Navy Ship Seized In Asset Fight (FT) An Argentine naval vessel crewed by more than 200 sailors has been seized in Ghana as part of an attempt by the US hedge fund Elliott Capital Management to collect on bonds on which Buenos Aires defaulted in 2001. A Ghanaian court ordered an injunction and interim preservation order against the ARA Libertad, a 100-metre long tall ship, following an application by Elliott subsidiary NML Capital on Tuesday. The hedge fund, run by the US billionaire Paul Singer, has been closely monitoring the course of the Libertad, according to sources familiar with the firm. Elliott had been waiting for the ship to stop in a port where it would have a chance to enforce legal judgments previously awarded by UK and US courts. The hedge fund declined to comment. Argentina slammed the interception of the Libertad as a “trick which these unscrupulous financiers” had pulled, adding that it “violates the Vienna Convention on diplomatic immunity”. Morgan Stanley commodities talks with Qatar hit snag (Reuters) Morgan Stanley's talks with Qatar's sovereign wealth fund over the sale of its commodities business have run into difficulty, and the deal may need to be reworked if it is to go ahead, banking sources said. One of the top banks in commodity trading over the past 30 years, Morgan Stanley has been in discussion for more than a year with Qatar over the sale of at least a majority stake in the energy-focused trading business, the bankers said. "There have been some differences, and Qatar is a bit lukewarm about it," one said. "It's not dead yet but definitely not imminent." Maple syrup stolen in Quebec seized by police in New Brunswick (The Star) Quebec police have seized between 700 and 800 barrels of maple syrup from a New Brunswick exporter, linking the drums to August’s massive heist of the sweet stuff. Étienne St-Pierre, owner of S.K. Exports in Kedgwick, N.B., told the Star that police executed a search warrant Sept. 26 and hauled away the barrels. “They said they were searching to find some stolen drums from Quebec,” he said. “It was a surprise. That was the first news I received.” St-Pierre said each barrel weighs about 270 kilograms and holds 170 litres of syrup, meaning police seized at least 119,000 litres of gooey Quebec gold. A spokesperson for the Sûreté du Québec, Sgt. Bruno Beaulieu, confirmed a search warrant had been executed in Kedgwick but said he could not comment on the investigation. The Federation of Quebec Maple Syrup Producers has never revealed the amount of syrup stolen from its secure St-Louis-de-Blandford, Que. warehouse in August. The facility held about 3.75 million litres of syrup, enough to fill one and a half Olympic swimming pools. St-Pierre said he obtained the barrels from a regular Quebec supplier, who he refused to identify.

Opening Bell: 03.11.13

EU Chiefs Seeking to Stave Off Euro Crisis Turn to Cyprus (Bloomberg) European leaders grappling with political deadlock in Italy and spiraling unemployment in France will turn to a financial rescue for Cyprus in an effort to stave off a return of market turmoil over the debt crisis. European Union leaders will meet for a March 14-15 summit in Brussels to discuss terms for Cyprus, including the island nation’s debt sustainability and possibly imposing losses on depositors. That comes as Italy struggles to form a government after an inconclusive Feb. 24-25 election and as concern over the French economy mounts with unemployment at a 13-year high. Spain's Bailout Fund Said to Seek Help on Bank Strategy (WSJ) Spain's bank bailout fund is seeking to hire advisers to help shape a long-term strategy for dealing with its portfolio of nationalized lenders, a week after calling off an auction of one of the most troubled banks. People briefed about the plan said the fund, known by its Spanish acronym FROB, will make contact with strategic consultants, and possibly with investment banks, once the plan has been approved by the FROB's board of directors. Is There Life After Work? By Erin Callan (NYT) "I didn’t start out with the goal of devoting all of myself to my job. It crept in over time. Each year that went by, slight modifications became the new normal. First I spent a half-hour on Sunday organizing my e-mail, to-do list and calendar to make Monday morning easier. Then I was working a few hours on Sunday, then all day. My boundaries slipped away until work was all that was left...I have often wondered whether I would have been asked to be C.F.O. if I had not worked the way that I did. Until recently, I thought my singular focus on my career was the most powerful ingredient in my success. But I am beginning to realize that I sold myself short. I was talented, intelligent and energetic. It didn’t have to be so extreme. Besides, there were diminishing returns to that kind of labor. I didn’t have to be on my BlackBerry from my first moment in the morning to my last moment at night. I didn’t have to eat the majority of my meals at my desk. I didn’t have to fly overnight to a meeting in Europe on my birthday. I now believe that I could have made it to a similar place with at least some better version of a personal life. Not without sacrifice — I don’t think I could have “had it all” — but with somewhat more harmony. I have also wondered where I would be today if Lehman Brothers hadn’t collapsed. In 2007, I did start to have my doubts about the way I was living my life. Or not really living it. But I felt locked in to my career. I had just been asked to be C.F.O. I had a responsibility. Without the crisis, I may never have been strong enough to step away. Perhaps I needed what felt at the time like some of the worst experiences in my life to come to a place where I could be grateful for the life I had. I had to learn to begin to appreciate what was left. At the end of the day, that is the best guidance I can give. Whatever valuable advice I have about managing a career, I am only now learning how to manage a life." Paper Trail Goes Cold in Case Against S&P (Reuters) In early 2007, as signs of distress began appearing in securities backed by residential mortgages, executives at Standard & Poor's began advising analysts responsible for rating mortgage bonds that they should put the phrase "privileged and confidential" on emails to one another. Analysts working for the McGraw Hill Cos division also were discouraged from doodling on notepads and official documents during meetings to discuss pending deals and existing ratings, several former S&P employees said. That was not the first time S&P had tried to caution employees about paper trails. In 2005, a full two years before the housing market began to melt down, several top S&P managers attended an off-site meeting at hotel in Old Saybrook, Connecticut, to discuss ways to increase the fees it collected from Wall Street banks for rating mortgage bonds. A former S&P executive said that after the meeting, employees were instructed to discard any notes they had taken from the meeting. InTrade Shuts Down (WSJ) InTrade, the Ireland-based website that allows users to place wagers on non-sports-related upcoming events, announced on Sunday that it is shutting its site down. In an official statement, the company does not go into great detail as to why it is closing its doors, only that it is related to “financial irregularities which, in accordance with Irish law,” require InTrade to cease operations until resolved. “At this time and until further notice, it is not possible to make any payments to members in accordance with their settled account balance until the investigations have concluded,” the company said. Commodities Squeeze Banks (WSJ) The sharp fall in commodity revenue has already claimed some victims. UBS AG, the Swiss bank that has been under pressure to cut costs and improve its performance, last year closed all its commodities-trading desks aside from those dealing in precious metals. Goldman, UBS, Deutsche Bank, and Barclays have all suffered departures of senior commodity traders to hedge funds and independent trading companies over the last several months. Average staffing in commodities trading declined 5.9% last year at major banks, according to Coalition. Artist Teaches George W. Bush How To Paint (Fox5) An artist in Cumming, GA spent a month teaching former President George W. Bush how to paint. Bonnie Flood said that President Bush has a passion for painting and shows real potential as an artists. "He started off painting dogs. I think he said he painted 50 dogs," Flood said. "He pulled out this canvas and started painting dogs and I thought, 'Oh my God, I don't paint dogs!" Flood, who does most of paintings at her home in Cumming, occasionally conducts workshops in Florida. That's where the former President heard about her. The next thing she knew, she was packing up her paints to spend a month in Boca Grande with President Bush. She said that she spent about six hours a day with the President, mixing paints and teaching him proper brush strokes. She says she wasn't intimidated but admits she really didn't know what to call him until she found the magic number. "I called him '43' because that's the way he signed his paintings. "When I really wanted him to do something, I would say, 'Mr. President you know that you don't do it that way.'" She says the President learned quickly and soon started painting fewer dogs and more landscapes. "He has such a passion for painting, it's amazing," Flood said. "He's going to go down in the history books as a great artist." Hostess Creditor, Private-Equity Firms Show Interest in Twinkies Brand (Reuters) Hostess Brands creditor Silver Point Capital and hedge fund Hurst Capital have expressed interest in buying Hostess's snack cake brands, including Twinkies, the New York Post reported. Paulson Said to Explore Puerto Rico as Home With Low Tax (Bloomberg) John Paulson, a lifelong New Yorker, is exploring a move to Puerto Rico, where a new law would eliminate taxes on gains from the $9.5 billion he has invested in his own hedge funds, according to four people who have spoken to him about a possible relocation. More US Profits Parked Abroad (WSJ) A Wall Street Journal analysis of 60 big U.S. companies found that, together, they parked a total of $166 billion offshore last year. That shielded more than 40% of their annual profits from U.S. taxes, though it left the money off-limits for paying dividends, buying back shares or making investments in the U.S. The 60 companies were chosen for the analysis because each of them had held at least $5 billion offshore in 2011. Twitter, Social Media Are Fertile Ground For Stock Hoaxes (Reuters) "Twitter pump and dump schemes are obviously something for the market to be concerned about, even if they are just a new way for people to do schemes that have been done forever," said Keith McCullough, chief executive officer at Hedgeye Risk Management in New Haven, Connecticut. He uses Twitter and has more than 22,000 followers. In such hoaxes, anonymous users set up accounts with names that sound like prominent market players, issue negative commentary, and spark massive declines. The selling that follows shows how the rapid spread of information on social media can make for volatile trading, and is a warning to investors who trade on news before fully verifying the source. SEC: Goldman Cannot Ignore Proposal to Split Chairman, CEO Roles (Reuters) SEC staff sent a letter to Goldman internal counsel Beverly O'Toole this week, saying the agency is "unable to concur" with Goldman's view that the shareholder proposal does not warrant a vote. El Paso Sheriff's deputies arrest 2 ice cream men for possession of pot (EPT) Saturday afternoon, Sheriff's deputies spotted a purple ice cream truck with a cracked windshield and an expired registration sticker along the 8600 block of Alameda. During the traffic stop, one of the occupants left the vehicle and led deputies on a brief foot pursuit before being caught. Two tupperware bowls containing a green leafy substance, believed to be marijuana, was found on the man, who was identified as 19-year-old Elijah Sanchez. The second occupant, identified as 29-year-old Anthony Arellano, was also charged with possession of marijuana after deputies found marijuana inside the vehicle. Arellano has been arrested in the past for numerous felony charges and a previous possession of marijuana charge in 2006, deputies said.

Opening Bell: 01.23.13

Greece Charges Statisticians Over Size of Deficit (FT) Greece has brought criminal charges against the official responsible for measuring the country's debt, thereby calling into question the validity of its 172 billion euros second bailout by the EU and International Monetary Fund. Andreas Georgiou, head of the independent statistical agency Elstat, and two senior officials are accused of undermining the country's "national interests" by inflating the 2009 budget deficit figure used as the benchmark for successive austerity packages. The three statistical experts face criminal charges of making false statements and corrupt practices, a judicial official said, adding that if found guilty they could serve prison terms of five to 10 years. They have denied any wrongdoing. Spain's Recession Deepens (WSJ) Spain's central bank said a recession in the euro zone's fourth-largest economy deepened slightly in the final quarter of last year, but it said austerity cuts are bringing the country's runaway budget deficit under control. Obama-Bashing Swapped for Pragmatism at Davos (Bloomberg) “We have to move on in our society,” Blackstone found Stephen Schwarzman said today in an interview in Davos with Bloomberg Television’s Erik Schatzker. “I like President Obama as a person, and he’s well- intentioned.” Schwarzman, 65, warned in Davos in 2010 that banks could restrict lending because “their entire world is being shaken and they’re being attacked personally.” Later that year, at a nonprofit group meeting, he likened Obama’s tax proposals to Hitler’s invasion of Poland. Third Point LLC CEO Daniel Loeb, who in 2010 compared Wall Street’s Obama supporters to “battered wives,” will help lead a Jan. 25 Davos dinner discussion, “Can Capitalism Evolve?” Schwarzman apologized in 2010 for his comparison of Obama’s effort to double taxes on private-equity income to the invasion of Poland. He said the analogy was inappropriate and that the administration’s need to work with business “is still of very serious concern.” JPMorgan's Jamie Dimon Apologizes, Attacks (WSJ) James Dimon of J.P. Morgan Chase was prepared in Davos to apologize for the more than $6 billion of trading losses racked up by the so-called London Whale, but he certainly wasn’t prepared to abase himself...Min Zhu, deputy managing director of the International Monetary Fund, reeled off a string of statistics to show that the industry certainly hadn’t cleaned up its act since the crisis, and Paul Singer, principal of hedge fund Elliott Associates, was also keen to lambaste big banks, including Mr. Dimon’s. The two had some testy exchanges and the body language indicated that Messrs. Singer and Dimon have exchanged fire quite a few times previously. Still, Mr. Dimon gave us good as he got. He kicked off with repeating his apology to shareholders for the London Whale trading losses, which led to his own bonus being slashed, saying, “If you’re a shareholder of mine, I apologize deeply.” Having offered this apology he then went on the offense. He pointed out that his bank lent money to a whole host of worthy organizations such as schools, hospitals, governments, and Italian and Spanish corporates and governments. And he also had some snappy comebacks. Elliott’s Singer said that the global banks are “too big, too leveraged, too opaque,” which left Mr. Dimon with an easy retort about how could a hedge fund possibly criticize a bank about being opaque? “Our [securities filing] 10K is 400 pages long,” Mr. Dimon said. “What would you like to know?” Geithner Exit Next Friday (AFP) US Treasury Secretary Timothy Geithner, who steered the administration of President Obama through the financial crisis, will step down from his post Friday, a source told Agence France Presse yesterday. Golfer Mickelson recants tax rant (NYP) Mickelson — who hinted he might move from his home state of California to escape higher taxes — said he regretted his public rant on the issue after setting off a political firestorm. “Finances and taxes are a personal matter and I should not have made my opinions on them public,” according to a statement from Mickelson, who plans to elaborate today at the Farmers Insurance Open. “I apologize to those I have upset or insulted and assure you I intend to not let it happen again.” Senator Lautenberg Suggests Spanking In Store For Mayor Cory Booker (CI via DI) "I have four children, I love each one of them. I can't tell you that one of them wasn't occasionally disrespectful, so I gave them a spanking and everything was OK," Lautenberg said with a smile in his first public comments since Booker announced he was considering a run for Senate. Banker's Latest Bet: Teamwork on Bonds (WSJ) Texas banking tycoon Andrew Beal is known for making unconventional moves, including gambling on high-stakes poker and a self-financed plan to launch rockets into space. His latest gambit: an attempt to wring money from giant banks by banding together aggrieved bondholders. Mr. Beal's CXA Corp. ran a pair of advertisements late last year, one appearing in The Wall Street Journal. The ads listed an alphabet soup of residential mortgage-backed securities held by CXA and asked those with positions in the same securities to join the company in investigating possible infractions by banks that sold the debt. If the groups can prove the mortgages that underlie the bonds were approved through shoddy underwriting, they could be entitled to compensation—CXA's payday alone could be tens of millions of dollars. Firms Keep Stockpiles Of 'Foreign' Cash In US (WSJ) Some companies, including Internet giant Google, software maker Microsoft, and data-storage specialist EMC Corp, keep more than three-quarters of the cash owned by their foreign subsidiaries at U.S. banks, held in U.S. dollars or parked in U.S. government and corporate securities, according to people familiar with the companies' cash positions. In the eyes of the law, the Internal Revenue Service and company executives, however, this money is overseas. As long as it doesn't flow back to the U.S. parent company, the U.S. doesn't tax it. And as long as it sits in U.S. bank accounts or in U.S. Treasurys, it is safer than if it were plowed into potentially risky foreign investments. SEC Reins In Ratings Firm (WSJ) The U.S. Securities and Exchange Commission barred Egan-Jones Ratings Co. from issuing ratings on certain bonds, an unprecedented step by the regulator and a setback for a small credit-rating firm with a history of courting controversy. The SEC said Tuesday that Egan-Jones couldn't officially rate bonds issued by countries, U.S. states and local governments, or securities backed by assets such as mortgages, for at least the next 18 months. The ban was part of an agreement the SEC reached with Egan-Jones and its president, Sean Egan, to settle charges that they filed inaccurate documents with the regulator in 2008. The SEC alleged that Egan-Jones misled investors about its expertise, and that Mr. Egan caused the firm to violate conflict-of-interest provisions. Lindenhurst dentist busted after reporting to work reeking of booze and drilling teeth while allegedly drunk (NYDN) Dr. Robert Garelick was hauled out of his Lindenhurst office in handcuffs Monday after his dental hygienist smelled booze on his breath and caught him administering Novocain to the wrong side of a patient’s mouth. “I observed Dr. Garelick looking for cavities in the right side of the patient’s mouth, but the cavities were in the left side,” hygienist Kimberly Curtis told police in a written statement. “I pointed this out to the doctor and that’s when he ordered more Novocain for the patient,” Curtis told cops. “So now, he basically numbed the whole patient’s mouth.” After noticing Garelick’s wobbly behavior Monday, Curtis texted co-worker Dina Fara, who called 911. Curtis said she sent the message after Garelick used a drill to treat another patient who had a chipped tooth. “He was filing the tooth down,” Curtis said. “When you’re using that drill, you have to be very careful and have a steady hand.” She said that just before Garelick treated the chipped tooth, he slipped into his office. “I noticed that he was drinking from a white and purple squeeze bottle,” Curtis said. “At first I didn’t think anything was wrong,” Curtis said. “But right after, he took a drink from that bottle, he got up and walked past me. When he did this I smelled a strong odor of alcohol.” The dentist initially claimed he only had a couple of beers with pizza during lunch Monday, according to Suffolk County cops. But Garelick, who was charged with misdemeanor reckless endangerment, later confessed to his drunken dentistry while being taken to a police precinct in the back of squad car. “I never had any beers with my pizza. I’ve been sipping at that bottle all along today,” he told police, referring to his squeeze bottle filled with vodka, according to a criminal complaint.

Opening Bell: 01.09.13

UBS Says Cleaning Up Its Act After Libor 'Shocker' (Reuters) UBS has yet to fully purge itself of a global interest rate scandal that has cost the Swiss bank its reputation and put it at risk of a wave of costly civil suits, its investment banking chief said on Wednesday. The once-venerable institution was fined a record $1.5 billion last month for manipulating Libor interest rates, the latest in a string of scandals including a $2.3 billion rogue trading loss and a damaging tax avoidance row with the United States. "We are very focused on recovering the honor and standing the organisation had in the past," Andrea Orcel told Britain's Parliamentary Commission on Banking Standards, set up in the aftermath of the Libor scandal. "I am convinced that we have made a lot of progress. I am also convinced that we still need to do more." [...] Committee member Justin Welby, the incoming Archbishop of Canterbury, asked Orcel if he was the right man to turn UBS around. "I feel I have a high level of integrity," the banker said. Orcel said that UBS was working at simplifying the investment banking business to make it less risky and prone to scandal. The committee, a cross-party panel of lawmakers headed by Conservative MP Andrew Tyrie, is switching its focus to standards and culture after spending most of the past three months assessing structural reform. Tyrie on Wednesday described the Libor rigging as "a shocker of enormous proportions". Button-Down Central Bank Bets It All (WSJ) Switzerland, for decades a paragon of safety in finance, is engaged in a high-risk strategy to protect its export-driven economy, literally betting the bank in a fight to contain the prices of Swiss products sold abroad. The nation's central bank is printing and selling as many Swiss francs as needed to keep its currency from climbing against the euro, wagering an amount approaching Switzerland's total national output, and, in the process, turning from button-down conservative to the globe's biggest risk-taker. JPMorgan Overhaul Widens (WSJ) The shift of Mr. Maclin and the departure of Mr. Staley, who once was seen as a top candidate to succeed James Dimon as chief executive, are the latest steps in a drastic reshaping of J.P. Morgan's executive suite. Many of the new leaders—a group that includes corporate and investment-bank co-heads Mike Cavanagh and Daniel Pinto, co-chief operating officer Matthew Zames and Chief Financial Officer Marianne Lake—are in their 40s. Mr. Cavanagh and Mr. Zames, who were asked last May to unwind a series of botched bets placed by a trader in the bank's Chief Investment Office known as the "London whale," are viewed as front runners for the top job, said people close to the bank. Ackman Braces for Legal Battle Over Herbalife (FBN) If filed, the lawsuit could involve alleged “tortuous interference,” implying Ackman intentionally damaged Herbalife’s business relationships, people close to Ackman said. On Tuesday, a large Herbalife distributor said he was leaving the company and called on other distributors to join him amid the controversy. In a sign of the importance of its distribution channels, Herbalife says in regulatory filings its relationship with and ability to influence distributors are items that can “materially” affect its financial condition. As of late Tuesday, people with knowledge of the matter said no decision on timing or even if a lawsuit will actually be filed had been made. The company has told FOX Business it is weighing legal action against Ackman. Ackman declined to comment on the matter. Herbalife has hired famed attorney David Boies to launch possible litigation against Ackman as well as the investment bank Moelis & Co., as its financial adviser. Goldman Will Report Fund Values Each Day (WSJ) In a reversal of industry practice, Goldman Sachs Group will begin disclosing the values of its money-market mutual funds daily rather than monthly, according to people familiar with the company's plans. Some of the changes will take effect as early as Wednesday...According to people familiar with Goldman's thinking, the company is beefing up its disclosures to satisfy investors' calls for greater transparency on fluctuations in the price of their investments. Brazil prostitutes to learn English ahead of World Cup (AP) Prostitutes in one of Brazil's biggest cities are beginning to sign up for free English classes ahead of this year's Confederations Cup and the 2014 World Cup. The president of the Association of Prostitutes of the city of Belo Horizonte says by telephone that 20 have already signed up for the courses and she expects at least 300 of the group's 4,000 members to follow suit. The association is organizing the classes and seeking volunteer teachers. Prostitution is legal in Brazil. Belo Horizonte will host six World Cup matches and Vieira said Tuesday "it will be important for the girls will be able to use English to let their clients know what they are charging and learn about what turns them on." AIG Cites Duty to Weigh Suing U.S. as Lawmaker Criticism Mounts (Bloomberg, related) American International Group said it has a duty to weigh joining a suit by former Chief Executive Officer Maurice “Hank” Greenberg that claims the insurer’s 2008 U.S. bailout was unconstitutional. “The board of directors has fiduciary and legal obligations to the company and its shareholders to consider the demand served on us,” CEO Robert Benmosche said yesterday in a statement. The board is scheduled to meet today to hear arguments from representatives of Greenberg and the U.S. Lawmakers including Senators Elizabeth Warren and Robert Menendez and Representative Peter Welch said New York-based AIG shouldn’t join the suit. “Taxpayers are still furious that they rescued a company whose own conduct brought it down,” Welch said in a letter to AIG Chairman Steve Miller. “Don’t rub salt in the wounds with yet another reckless decision.” Vow of New Light For 'Dark' Trades (WSJ) Richard Ketchum, chief executive of the Financial Industry Regulatory Authority, said in an interview Tuesday that the regulator is expanding its oversight of the dark-trading venues, with an eye on whether orders placed in public exchanges are "trying to move prices or encourage sellers that may advance their trading in the dark market." The regulator also is boosting its surveillance of high-speed trading and is increasingly looking at rapid-fire trading across exchanges, he said. "You're going to see more [focus] in those areas in 2013," Mr. Ketchum said. Goldman, Morgan Stanley to Settle on Foreclosures (Reuters) Goldman Sachs and Morgan Stanley are among a group of banks expected to agree as soon as this week to a $1.5 billion settlement with federal regulators over botched foreclosure claims, two sources familiar with the matter said on Tuesday. The accord would come on the heels of a separate $8.5 billion settlement announced on Monday with 10 bigger mortgage servicers, including Bank of America, Citigroup, JPMorgan Chase, Wells Fargo...Goldman and Morgan Stanley's respective roles in the settlement stems from mortgage-servicing businesses that the two investment banks purchased in the run-up to the subprime mortgage crisis, and have since sold. Goldman had owned Litton Loan Servicing and Morgan Stanley owned Saxon Capital. Taco Bell responds to teen's request for a custom Speedo (LI) The week before Christmas, 15-year-old Ryan Klarner posted on Taco Bell’s Facebook page, introducing himself with a rundown of his swimming and diving achievements before making an offbeat request. “[I]s there any way you guys could make me a customized Speedo that says think outside the buns on the back of it? If you did, that would mean the world to me,” the Illinois teen asked...Klarner said he first came up with the idea a couple of years earlier and decided last month to go ahead and ask, even though he never had asked a company on Facebook for anything before. “I did not expect it to blow up as much as it has. I didn’t really expect to get the Speedo out of it, either,” he said. But last Wednesday, the social media team at Taco Bell wrote back. “What size do you wear? And what’s your address?” “He really wanted something and he went after it,” Tressie Lieberman, director of digital and social engagement, said. When we think people are really extraordinary...then we want to reward them.”

Opening Bell: 12.12.12

Three Questioned In Libor Probe (WSJ) While the SFO didn't identify the men, one of them is Thomas Hayes, a former trader at UBS and Citigroup, according to people familiar with the matter. Authorities in multiple countries have been looking into Mr. Hayes as an alleged coordinator of a group of employees at multiple banks who sought to manipulate the London interbank offered rate, or Libor, according to people familiar with the case. One of the others arrested was Terry Farr, an employee of British brokerage firm R.P. Martin Holdings Ltd. in London who is currently on leave from the firm, according to a person familiar with the case. Mr. Farr has been under investigation for possibly helping bank employees coordinate their efforts to influence Libor, according to people familiar with the case. HSBC Mexican Branches Said to Be Traffickers’ Favorites (Bloomberg) From 2006 to 2010, the Sinaloa cartel in Mexico and the Norte del Valle Cartel in Columbia moved more than $881 million in proceeds through HSBC’s U.S. unit, said Lanny Breuer, assistant attorney general for the U.S. Justice Department’s criminal division. Breuer, along with U.S. Attorney Lorretta Lynch in Brooklyn, New York, announced yesterday the bank had agreed to pay at least $1.9 billion to settle money laundering probes. “These traffickers didn’t have to try very hard,” Breuer said at a press conference in Brooklyn. “They would sometimes deposit hundreds of thousands of dollars in cash in a single day into a single account using boxes designed to fit the precise dimension of the tellers’ windows in HSBC’s Mexico branches.” It Could Get Hairy Before 'Cliff' Deal: Greenspan (CNBC) "The best possible outcome is to take something like Simpson-Bowles as it came out originally and work off that," he said, of a deal to avoid the automatic tax hikes and spending cuts that go into effect at the end of the year. But he said that reaching a final agreement won't be an easy process, since the president believes he has a mandate following the election while House Republicans believe they, too, have a mandate. "I'm not at altogether clear how much control (Speaker) Boehner has over the overall caucus," Greenspan said. "At the end of the day it will all work out but it's going to be a bit hairy before we get there." Buffett Joins Soros in Effort to Raise Taxes on Estates (Bloomberg) Billionaireinvestors Warren Buffett and George Soros are calling on Congress to increase the estate tax as lawmakers near a decision on tax policies that expire Dec. 31. In a joint statement Tuesday, Buffett, Soros and more than 20 other wealthy individuals asked Congress to lower the estate tax’s per-person exemption to $2 million from $5.12 million and raise the top rate to more than 45 percent from 35 percent. An estate tax structured this way will “raise significant revenue to reduce the deficit and fund vital services, will only be paid by the top one percent of estates, will raise more from the wealthiest estates” and will simplify compliance, said the statement. It also was signed by John Bogle, founder of mutual fund company Vanguard Group Inc., and former President Jimmy Carter. U.S. Probe of SAC Trading Said to Be Linked to 2010 Case (Bloomberg) A U.S. investigation of possible insider trading at SAC Capital Advisors LP, the $14 billion hedge fund run by Steven A. Cohen, is linked to a 2010 regulatory lawsuit over allegedly illegal trades in InterMune Inc, according to a person with knowledge of the matter. The Federal Bureau of Investigation and the Securities and Exchange Commission’s probe of trades that SAC Capital made in the Brisbane, California-based biopharmaceutical company is tied to a December 2010 SEC lawsuit against an investor, said the person, who asked not to be named because the matter isn’t public. The investor bought InterMune options before a European Union regulatory panel urged approval of the company’s drug Esbriet to treat a fatal lung disease, the person said, declining to elaborate. Man says law standing between him and sex acts with donkey is unconstitutional (NYDN) Lawyers representing the frisky farmhand thrown in jail for allegedly masturbating with a donkey are now fighting to have Florida’s statute banning sex with animals declared unconstitutional. “By making sexual conduct with an animal a crime, the statute demeans individuals like Defendant by making his private sexual conduct a crime,” attorneys for 32-year-old Carlos R. Romero wrote in a motion filed last week, the Ocala-Star Banner reported. Romero was cuffed at an Ocala farm back in September after farm proprietor Gerald James told police he saw Romero with his pants down as he was seemingly having sex with a donkey named Doodle in an equipment room on Aug. 15, according to police report obtained by thesmokinggun.com. Romero later pleaded not guilty to a first-degree misdemeanor charge of sexual activities involving animals. He announced last week that he wanted his case to go to trial. His attorneys argue that Florida’s statute violates the farmhand’s rights by stripping him of his “personal liberty and autonomy when it comes to private intimate activities.”They say the statute is unconstitutional because it doesn’t require the state to provide any proof of the animal’s suffering “or any proof of the sexual activity being non-consensual.” Inside The Risky Bets Of Central Banks (WSJ) While many national governments, including the U.S., have failed to agree on fiscal policy—how best to balance tax revenues with spending during slow growth—the central bankers have forged their own path, independent of voters and politicians, bound by frequent conversations and relationships stretching back to university days. If the central bankers are correct, they will help the world economy avoid prolonged stagnation and a repeat of central banking mistakes in the 1930s. If they are wrong, they could kindle inflation or sow the seeds of another financial crisis. Failure also could lead to new restrictions on the power and independence of central banks, tools deemed crucial in such emergencies as the 2008-2009 financial crisis. Freeport's $20 Billion Deal Stirs Backlash (WSJ) Freeport agreed last week to acquire energy explorers McMoRan Exploration Co. MMR +0.85% and Plains Exploration & Production Co. PXP -0.42% in transactions that will cost the Arizona mining giant about $20 billion including assumed debt. The deal will result in six directors with overlapping roles at Freeport and McMoRan Exploration receiving payouts for their shares totaling more than $130 million, according to securities filings. Some Freeport investors and analysts also have questioned the wisdom of a metals miner diving into the oil and gas business. They have taken issue with what they call conflicts of interests among the shared executives and directors at Freeport and McMoRan and the fact that the deal as structured doesn't require a Freeport shareholder vote. Fed Discourages Bank Dealmaking (WSJ) The Federal Reserve is pushing large U.S. banks to forget about all but the smallest acquisitions for a while amid a raging debate over the risk big lenders pose to the financial system. Man Drive 100 MPH To Wedding, Gets Arrested (Again) (NWI) Timothy N. Thompson, 23, of Valparaiso, was supposed to be married in a 7 p.m. ceremony. Instead, Thompson was arrested for resisting law enforcement, criminal recklessness and reckless driving. He was also cited for speeding and improper passing. According to police, an officer spotted Thompson about 6:30 p.m. Saturday speeding north in the center lane of Willowcreek Road. The officer estimated Thompson was driving 100 mph. Thompson allegedly continued to drive erratically, switching lanes abruptly and, according to the report, nearly wrecking. Police reported they followed Thompson as he turned into the parking lot of Nativity of Our Savior Church on Willowcreek Road, where he again nearly tipped over the Jeep Grand Cherokee. Once he entered the church's parking lot, three people -- later identified as relatives -- began flailing their arms and yelling at him. Thompson drove through the parking lot, accelerating and doing a "doughnut," creating a thick blanket of tire smoke, according to the report. When he stopped, Thompson told police he was late for his wedding and estimated he was doing "about 90" mph. He also told police he had his emergency flashers on and was sounding his horn to alert drivers. When an officer walked away from Thompson's vehicle, Thompson reentered his vehicle and drove toward the entrance of the church, where he was stopped by police again. "Oh, I thought you were done and I'm late for a party in Chicago," police reported Thompson saying. "It now means I have to drive really fast to get there." Thompson, who also told police he had just been released from jail that day, didn't make his wedding. He was transported to Porter County Jail and held without bond.