Opening Bell: 3.27.18

Loeb and Ack working together?; Cryan’s final days?; a trip down memory lane; the revolution comes to Maiden Lane; Bobby Ax at Del Posto; let the ball go, dude; and more!
Author:
Publish date:
Third Point LLC

Third Point LLC

Loeb Joins Ackman in United Technologies as CEO Weighs Breakup [Bloomberg]
The maker of jet engines and elevators is the latest target for Dan Loeb’s Third Point, a hedge fund that has called for dramatic changes at other industrial companies. Bill Ackman’s Pershing Square has also taken a position in United Technologies, Bloomberg News reported last month.
Hayes said recently that the stock was undervalued and that he was aware of rumors that United Technologies had been a target of activists. While the decision to consider a split wasn’t driven by outside investors, he said he’s open to ideas to boost the share price.

S&P 500 Bounces Off Technical Level, Again [WSJ]
After a downdraft on Friday, the S&P 500 closed just about three points above its 200-day moving average. On an intraday basis, the index got within a point. Monday’s rebound once again puts breathing room between the index and the average, reducing concerns that the index could cross below that level….
“That we bounced off the 200-day moving average twice is encouraging,” said Jack Ablin, founding partner and chief investment officer at Cresset Wealth Advisors, which has not reduced stock exposure during the recent market selloff. “Investors still believe there’s value in this market and they’re willing to buy when it gets around that level.”

Deutsche Bank Chairman Holds Talks With CEO Candidates [Bloomberg]
Deutsche Bank AG Chairman Paul Achleitner has had talks with a number of potential successors to Chief Executive Officer John Cryan as part of plans to replace the manager should a better candidate emerge, according to people with knowledge of the matter.

Women at Credit Suisse paid 29% less than men [FT]
The Swiss bank said on Tuesday that women are paid 28.9 per cent less than men on an hourly median basis in the year to April 2017, or 39.2 per cent less on a mean basis.
The discrepancy is even starker when it comes to bonus pay. Bonuses received by men are 56 per cent more than those paid to woman on a median basis and 70.2 per cent more on a mean basis….
“Our gender pay gap, like that of many other financial services firms, reflects the imbalance in the number of men in senior and higher paid roles compared to the number of women.”

Uber Ordered to Take Its Self-Driving Cars Off Arizona Roads [NYT]
“The incident that took place on March 18 is an unquestionable failure to comply with this expectation,” Gov. Doug Ducey of Arizona wrote in a letter sent to Dara Khosrowshahi, Uber’s chief executive. “Arizona must take action now.”
Mr. Ducey said he was troubled by a video released from the Tempe Police Department that seemed to show that neither the Uber safety driver nor the autonomous vehicle detected the presence of a pedestrian in the road in the moments before the crash.

New York Fed Weighs a Wall Street Overseer, and Left Spies an Opening [NYT]
Mr. Williams’s possible appointment — which isn’t yet final and could still change — drew swift criticism from a variety of Democratic lawmakers, progressive groups and left-leaning economists. They raised concerns about his record as a banking regulator and as a policymaker, and also criticized the search process for a lack of transparency….
In a statement Monday, Senator Elizabeth Warren, Democrat of Massachusetts, said Mr. Williams’s record in San Francisco “raises several questions, including about his fitness to supervise Wall Street banks.” She said the Fed’s Board of Governors, which must approve appointments, shouldn’t do so for Mr. Williams unless he testifies before the Senate Banking Committee, which has no formal role in the selection process.

10 Years Later: What Has and Hasn’t Changed [WSJ]
The financial crisis and the massive federal response reshaped the world we live in. Though the economy is in one of its longest expansions and stock indexes have hit new highs, many people across the political spectrum complain that the recovery is uneven and the markets' gains aren't fairly distributed. The Wall Street Journal takes a look at some of the most eventful aspects of the response and how we got to where we are today.

Trust Betrayed: Wives of White-Collar Criminals Tell Their Stories [NYT]
Ms. Lawler, 60, is the founder of the White-Collar Wives Club, a blog she started in 2013, three years after her husband of 26 years was sentenced to 24 months in jail for embezzling $2.5 million dollars from a health care company in Massachusetts. In 2014, she took it a step further and created the White-Collar Wives Project, which includes the blog and a private online support group called “The Secret Lives of White-Collar Wives,” with about 70 members from around the world. Her mission was twofold: To raise awareness of the stigma and financial ruin facing the families of white-collar criminals, and to help guide women through their trauma and legal morass….
“These guys are master manipulators,” said Ms. Lawler. “It’s so hard for people to understand. When you’re living a modest lifestyle and the paycheck gets larger and larger, you don’t question it. A lot of women sign things unknowingly or have their signature forged. A lot don’t want to know. You shut down the logical part of your brain that says, ‘this is impossible.’ You don’t want it to be true.”

‘Billions’ Is Back and Still Spotlighting NYC’s Hottest Restaurants [Eater NY]
Known in the food world as a low-key excellent restaurant arbitrator, Showtime show Billions premiered its third season on Sunday night and highlighted three well-regarded New York City restaurants. Wo Hop, Veselka, and Del Posto all made the cut this go-round….
All three restaurants featured are food lover destinations: Wo Hop is known as a late night Chinatown must, and longtime East Village Ukrainian diner Veselka is an NYC essential. (This isn’t Veselka’s first turn in the limelight; it also has an upcoming cameo in Ocean’s 8.) The show has gone to Mario Batali restaurants before — Babbo was in a prior season — and the Del Posto scene was shot last fall. Since then, the Chelsea fine dining Italian restaurant took a reputation hit when allegations of Batali’s rampant sexual misconduct surfaced.

Man chasing baseball gets stuck between walls for three hours [UPI]
Michael Anthony Maggiacomo, who was rescued Friday from between the exterior walls of a Walgreens and Heald College's parking structure near Ala Moana in Honolulu, said he was bouncing a baseball on top of the Heald College Plaza when it got away from him.
"This is like the sixth ball, so I think 'Okay, I got to go down and get these,'" Maggiacomo, who is known to locals as "Baseball Mike," told KHON-TV.

Related

Opening Bell: 11.18.15

Yellen no fan of Fed oversight bill; Barclays faces (another) big forex fine; "Throughout the four to five hour trip, Taco Bell is encouraging fans to follow the historic relocation via a live webcam"; and more.

Opening Bell: 10.25.12

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

Opening Bell: 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: 12.14.12

UBS Unit Said to Be Close to Guilty Plea in Rate-Rigging Scandal (NYT) Federal prosecutors are close to securing a guilty plea from a UBS subsidiary at the center of a global investigation into interest rate manipulation, the first big bank to agree to criminal charges in more than a decade. UBS is in final negotiations with American, British and Swiss authorities to settle accusations that its employees reported false rates, a deal in which the bank's Japanese unit is expected to plead guilty to a criminal charge, according to people briefed on the matter who spoke of private discussions on the condition of anonymity. Along with the rare admission of criminal wrongdoing at the subsidiary, UBS could face about $1 billion in fines and regulatory sanctions, the people said. Meet Them In St. Louis: Bankers Move (WSJ) Smaller cities around the nation have emerged as unlikely hives of financial-services hiring, thanks to lower wages, municipal-tax incentives and the misfortunes of older hubs that are home to companies ravaged by the 2008-2009 financial crisis. The beneficiaries are spread across the U.S., according to an analysis of data by The Wall Street Journal. In St. Louis, the 19th-largest U.S. metropolitan area, securities-industry employment surged 85% between January 2007 and September 2012 to a recent 12,190, according to figures compiled by Moody's Analytics. New York lost 9% of its jobs in the securities, commodities, asset-management and fiduciary-trust areas over the same period, leaving it with 195,000. Counter-Terrorism Tools Used to Spot Staff Fraud (FT) JPMorgan Chase has turned to technology used for countering terrorism to spot fraud risk among its own employees and to tackle problems such as deciding how much to charge when selling property behind troubled mortgages. The technology involves crunching vast amounts of data to identify hard-to-detect patterns in markets or individual behavior that could reveal risks or openings to make money. Other banks are also turning to "big data", the name given to using large bodies of information, to identify potential rogue traders who might land them with massive losses, according to experts in the field...Guy Chiarello, JPMorgan's chief information officer, said the bank was mining massive bodies of data in "a couple of dozen projects" that promised to have a significant affect on its business, although he refused to give further details. According to three people familiar with its activities, JPMorgan has used Palantir Technologies, a Silicon Valley company whose technology was honed while working for the US intelligence services, for part of its effort. It first used the technology to spot fraudsters trying to hack into client accounts or ATMs, but has recently started to turn it on its own 250,000-strong staff. Obama Meets Boehner at White House for Budget Talks (Bloomberg) President Barack Obama and House Speaker John Boehner met for a third time at the White House to discuss averting spending cuts and tax increases before a year- end deadline. Boehner and Obama met for almost an hour yesterday, with no public announcement of progress. In January, more than $600 billion in spending cuts and tax increases, the so-called fiscal cliff, are scheduled to begin. “The president and speaker had a frank meeting in the Oval Office,” Boehner spokesman Brendan Buck said in an e-mailed statement, adding that the “lines of communication remain open.” Britain's Queen Quizzes Central Bank on Financial Crisis (CNBC) During a visit to the Bank of England on Thursday, the Queen was overheard asking whether a "lax" attitude to financial regulation had contributed to the financial crisis. After touring the vast vaults of gold bullion that lie beneath the central bank in London, Queen Elizabeth reportedly asked the central bank officials whether the Financial Services Authority (FSA) that was meant to regulate the banking system had not been aggressive enough - "did not have the teeth" - in its response to the crisis...The Queen was then told that officials in the room were charged with ensuring the crisis did not happen again. The Queen's husband, Prince Philip, then jokingly asked "There's not another one coming, is there?" before telling the officials present "Don't do it again." John McAfee Returns to US, Admits Playing 'Crazy Card' (ABC) After three weeks ducking authorities in Belize, by hiding in attics, in the jungle and in dingy hotels, he turned up in Guatemala Dec. 3. Barely a day later he was detained for entering the country illegally. As Guatemala officials grappled with how to handle his request for asylum and the Belize government's demand for his deportation, McAfee fell ill. The mysterious illness, described by his attorney alternately as a heart ailment or a nervous breakdown, led to a scene with reporters chasing his ambulance down the narrow streets of Guatemala City and right into the emergency room, where McAfee appeared unresponsive. He now says it was all a ruse: "It was a deception but who did it hurt? I look pretty healthy, don't I?" He says he faked the illness in order to buy some time for a judge to hear his case and stay his deportation to Belize, a government he believes wants him dead. When asked whether he believes Belize officials where inept, he didn't mince words. "I was on the run with a 20-year-old girl for three and a half weeks inside their borders and everyone was looking for me, and they did not catch me," he said. "I escaped, was captured and they tried to send me back. Now I'm sitting in Miami. There had to be some ineptness." [...] He denies any involvement in his neighbor's death but adds that he is not particularly concerned about clearing his name. He is focused on getting his 20-year-old and 17-year-old girlfriends out of Belize and says he has no idea what he'll do next, where he'll live or how he'll support himself. CNBC v. Buffett (NYP) The “Oracle of Omaha” sent a terse e-mail to editors at CNBC yesterday after a reporter for the cable news network railed against his recent repurchase of Berkshire Hathaway shares. Gary Kaminsky, CNBC’s capital markets editor, took Buffett to task for the $1.2 billion stock buyback, calling it “hypocritical to the maximum level.” Kaminsky claimed that Buffett’s purchase allowed the seller — described by Berkshire as the “estate of a long-time shareholder” — to avoid potentially higher capital gains taxes next year...In his rebuttal e-mail, Buffett said capital gains taxes don’t apply to estates. “Mr. Kaminsky also made the statement that the estate that was a seller was better off by selling in 2012 than 2013,” he wrote. “This, too, was incorrect.” He said capital gains are wiped out by stepped-up basis rules, with assets marked at their current fair-market value at the time of death. Buffett also blasted Kaminsky for saying his buyback was hypocritical on principal as Buffett is known to eschew buybacks. Buffett attached a copy of Berkshire’s 1984 annual report showing he has outlined conditions under which he would favor buybacks. CNBC anchor Melissa Lee read a correction late Tuesday that thanked the famed investor for “watching and setting us straight.” Fisher: Fed Risks 'Hotel California' Monetary Policy (CNBC) Dallas Fed President Richard Fisher told CNBC that he's worried the U.S. central bank is in a "Hotel California" type of monetary policy because of its "engorged balance sheet." Evoking lyrics from the famous song by The Eagles, he said he feared the Fed would be able to "check out anytime you like, but never leave." Fisher said on "Squawk Box" that he argued against revealing the new inflation and unemployment targets set by the Fed this week, saying he's worried that the markets will become "overly concerned" with the thresholds. Euro-Zone Downturn Eases (WSJ) Data company Markit said on Friday its preliminary purchasing managers' index, a gauge of activity among euro-zone factories and services companies, rose to 47.3 in December from 46.5 in November. A reading above 50.0 would signal an expansion. The national measure for Germany picked up to 50.5 from 49.2 in November, indicating that activity rose in the euro zone's largest member. "The euro-zone downturn showed further signs of easing in December, adding to hopes that the outlook for next year is brightening," said Chris Williamson, chief economist at Markit. Residents find neighbor at their door with machete (KS) A 38-year-old Bremerton man was arrested by police Monday night for allegedly confronting his neighbors with a machete in response to alleged vandalism at his residence, according to documents filed in Kitsap County District Court. Officers were called to a Nollwood Lane address shortly after 8 p.m. Monday. Two residents said when they answered a knock at their door, a man was standing in the doorway holding a machete. The man, a neighbor, reportedly said he was tired of vandalism to his home and blamed it on a family member of his neighbors, police said. The neighbors attempted to slam the door on the man, but he reportedly put his foot into the door holding it open, police said. The neighbors were ultimately able to close it, though the suspect denies he put his foot in the door. Police interviewed the man, 38, who admitted he'd retrieved the machete out of anger after another incident of vandalism.

Opening Bell: 12.03.12

Fiscal Cliff Talks At Stalemate (WSJ) Leading figures on both sides doubled down on their positions in interviews that aired Sunday, and they blamed each other for the current standoff, reflecting the talks that House Speaker John Boehner (R., Ohio) told "Fox News Sunday" have gone "nowhere." Treasury Secretary Timothy Geithner, speaking on the same program for the Obama administration, suggested Republicans needed to take a breather from negotiations but would ultimately agree to raise tax rates—a key White House demand that is part of its push to raise $1.6 trillion in taxes over 10 years. "It's obviously a little hard for them now, and they're trying to figure out where they go next, and we might need to give them a little time to figure out where they go next," Mr. Geithner said. Geithner Joins Boehner to Trade Blame on Fiscal Cliff Talks (Bloomberg) “There’s not going to be an agreement without rates going up,” Geithner said in a taped interview that aired Sunday on CNN’s “State of the Union.” Republicans will “own the responsibility for the damage” if they “force higher rates on virtually all Americans because they’re unwilling to let tax rates go up on 2 percent of Americans.” Clock Ticks For SAC Investors (WSJ) Seventy-five days remain until Feb. 15, the date by which investors must tell SAC whether they want to pull money from the firm during the next redemption period...Some investors already decided to pull out. French bank Société Générale SA, which has client money in SAC through its Lyxor asset-management arm, has put in a request to pull its money from the firm, according to people familiar with the matter. It is unclear how much money Lyxor has in SAC. Many, however, said they would reserve judgment, at least for now. Ironwood Capital Management, a San Francisco-based investment firm with client money in SAC, has been in touch with investors about the position and is monitoring the situation, said a person familiar with the firm. Last week, a unit within Morgan Stanley's MS +0.06% asset-management arm that has client money with SAC sent a note telling employees it would monitor the situation and be in touch frequently with SAC, according to a person familiar with the bank...Greycourt & Co., Inc., a Pittsburgh-based firm that manages about $9 billion for wealthy families, says it is sticking with SAC. Greycourt cited the stellar long-term returns of the firm, what it says is a robust compliance staff at SAC, Mr. Cohen's promise to cover any penalties himself and a belief that the firm's investment portfolio would be well-protected, even if it eventually faces charges. "The SAC portfolio is liquid enough that I'm not terribly concerned," says Gregory Curtis, Greycourt's chairman. "I very much hope that [Mr.] Cohen hasn't been behaving badly, but either way I'm not too concerned about our client positions." UK’s Euro Trade Supremacy Under Attack (FT) The City of London should be deposed as the euro's main financial center so the single currency club can "control" most financial business in the euro zone, France's central bank governor has said. Christian Noyer of the Banque de France said there was "no rationale" for allowing the euro area's financial hub to be "offshore", in a blunt assessment that will fan UK concerns over EU rules being rigged against it. "Most of the euro business should be done inside the euro area. It's linked to the capacity of the central bank to provide liquidity and ensure oversight of its own currency," Mr Noyer told the Financial Times while touring Asia to promote Paris as a renminbi trading center. "We're not against some business being done in London, but the bulk of the business should be under our control. That's the consequence of the choice by the UK to remain outside the euro area." Zoe Cruz trying to make a return to high finance, has reconciled with John Mack (NYP, earlier) Sources say Cruz has reconciled with her former boss Mack, who helped fuel her rise within their firm before their falling out. He has been helping his one-time protégée in her efforts to land at a buyout firm such as KKR. Mack also has been a shoulder for Cruz to lean on as she copes with the split from her husband Ernesto Cruz...[who] was once reprimanded by his superiors in the mid-2000s for frolicking in a hotel pool in Midtown after a company Christmas gala with a group of female assistants, according to sources familiar with the situation. SEC Chief Delayed Rule Over Legacy Concerns (WSJ) Internal SEC emails, released to a congressional panel and reviewed by The Wall Street Journal, appear to show how a last-minute intervention by a consumer lobbyist might have helped persuade Ms. Schapiro to change her mind and delay one of the centerpiece measures of the Jumpstart Our Business Startups, or JOBS, Act. In Panicky Russia, It’s Official: End of World Is Not Near (NYT) There are scattered reports of unusual behavior from across Russia's nine time zones. Inmates in a women's prison near the Chinese border are said to have experienced a "collective mass psychosis" so intense that their wardens summoned a priest to calm them. In a factory town east of Moscow, panicked citizens stripped shelves of matches, kerosene, sugar and candles. A huge Mayan-style archway is being built — out of ice — on Karl Marx Street in Chelyabinsk in the south. For those not schooled in New Age prophecy, there are rumors the world will end on Dec. 21, 2012, when a 5,125-year cycle known as the Long Count in the Mayan calendar supposedly comes to a close. Russia, a nation with a penchant for mystical thinking, has taken notice. Last week, Russia's government decided to put an end to the doomsday talk. Its minister of emergency situations said Friday that he had access to "methods of monitoring what is occurring on the planet Earth," and that he could say with confidence that the world was not going to end in December. He acknowledged, however, that Russians were still vulnerable to "blizzards, ice storms, tornadoes, floods, trouble with transportation and food supply, breakdowns in heat, electricity and water supply." Similar assurances have been issued in recent days by Russia's chief sanitary doctor, a top official of the Russian Orthodox Church, lawmakers from the State Duma and a former disc jockey from Siberia who recently placed first in the television show "Battle of the Psychics." One official proposed prosecuting Russians who spread the rumor — starting on Dec. 22. Old testimony may bite Cohen in SEC case (NYP) Steve Cohen’s sworn testimony in another legal skirmish could come back to haunt his $14 billion hedge-fund empire...In 2011, Cohen gave several days of deposition testimony in the civil fraud case, in which Fairfax sued SAC and other firms for allegedly conspiring to drive down its share price. The case was dismissed due to a lack of evidence, but the testimony offers a rare look into Cohen’s views on illegal trading. In his testimony, Cohen called SEC rules on insider trading “vague” and said he doesn’t expect his employees to follow the company’s internal compliance manual to the letter. When asked whether it was “legal or illegal to trade on material nonpublic information,” Cohen said: “It depends on the circumstance.” “So there are circumstances, in your view, in which it is legal . . . to trade on the basis of material, nonpublic information?” asked Fairfax ’s lawyer, Michael Bowe. “Yes,” Cohen said. Among them, he said, is when employees trade in the opposite direction of the nonpublic information they receive. He also said he didn’t expect employees to adhere to the company’s compliance manual in every situation. “See, we don’t operate our firm in absolutes,” he said. “When I look at this manual, I see guidelines.” Morgan Stanley trader probed over trades made while at Goldman (Reuters) Morgan Stanley trader Edward Glenn Hadden is under investigation by regulators at CME Group over trades in Treasury futures four years ago while he was employed by Goldman Sachs, according to a regulatory filing. Hadden is a managing director and head of global interest rates products at Morgan Stanley. Prior to joining Morgan Stanley, Hadden was a partner at Goldman Sachs, and head of government bond trading. Hedge Funds Increase Bullish Bets Most Since August (Bloomberg) Hedge funds increased bullish bets on commodities by the most since August as evidence that China is accelerating outweighed concern that U.S. lawmakers have yet to resolve an impasse over automatic spending cuts and tax rises. Krawcheck, possible SEC head, raises Washington (Reuters) ...many who have worked with her say Krawcheck was a smart, analytical and competent executive who not only knew the business, but was good at building consensus among different units of companies. She helped restore brokerage Smith Barney's reputation at Citigroup and was popular with many of the financial advisers at Merrill Lynch. Schumer and other lawmakers contacted by Reuters did not return calls or requests for comment about meetings with Krawcheck or their thoughts about her. In the end, of course, Krawcheck may not land in Washington at all, two people who know her said. She has had discussions about a variety of roles with several companies, one source said. "She has lots of balls in the air," said the source, who asked not to be named because the conversations were private. "Sallie always has a plan." Bret Easton Ellis mistakenly asks for cocaine on Twitter (DJ) Bret Easton Ellis, famed author of "American Psycho," tweeted a request for cocaine Sunday morning, leaving many to speculate that it was supposed to be a private message...“Come over at do bring coke now,” he tweeted at 3:44AM, stranding his 360,000 followers in a state of bewilderment regarding what the cryptic tweet could possibly mean.