Opening Bell: 9.21.18

Optimism still reigns; Danske still in trouble; Goldman still renovating; Woman uses toilet plunger as handle on public transit; and more!
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Bullish Mood Buoys Stocks as Treasury Yields Rise: Markets Wrap [Bloomberg]
The Stoxx Europe 600 Index headed for its best week in six months and equity-index futures signaled a higher U.S. open. The MSCI All-Country World Index was poised for a seven-month high after its strongest week since May, as stocks across Asia capped their best two-week rally since February. Japan’s Topix Index closed at the highest in four months.
Core European bonds inched higher after data showed euro-area expansion edged lower in September as manufacturing export orders slumped to the weakest in five years, though the euro clung onto gains to head for a three-month high. Italian bonds climbed as Finance Minister Giovanni Tria prepares a draft budget. Crude oil headed for a second weekly advance, leading the Bloomberg Commodity Index to its highest level in more than a month.

SummerOfLloyd

Danske Bank money laundering 'giga scandal' spreads to Britain [Reuters]
“This is a giga scandal,” European Union Competition Commissioner Margrethe Vestager said, joining a growing chorus of calls for a clampdown on the billions of euros which are alleged to have been “washed” through European banks.
An NCA spokeswoman said the British agency was working with partners across government to restrict the ability of criminals to use UK-registered companies in money laundering.
British and Russian entities dominate a list of accounts used to make 200 billion euros ($236 billion) in payments through Danske Bank’s branch in Estonia between 2007 and 2015, many of which the bank said this week are suspicious.

JPMorgan: An economic cold war may be coming [CNBC]
Stock markets in both countries have climbed this week despite fresh tariff announcements.
Analysts said the duties were not as severe as traders expected, and there is still hope of reconciliation. But reality may prove otherwise as the world's two largest economies, each coming from a vastly different culture, pursue their own development.
"Now we need to think about whether this current trade war will turn into an economic cold war. We hope it doesn't," said Jing Ulrich, managing director and vice chairman of Asia Pacific at J.P. Morgan Chase.

Goldman’s Top Stock-Trading Executive to Depart [WSJ]
Paul Russo, who has run Goldman’s equities business since 2012, is negotiating his exit and is likely to depart in the coming weeks, according to people familiar with the matter. The firm is likely to give additional responsibilities to three executives—Brian Levine, Jeff Nedelman and Phil Berlinski—while Mr. Russo’s counterpart, Michael Daffey, continues to head the business globally from London, some of the people said.

Mike Novogratz: Cannabis stocks today are like cryptocurrencies in Dec. 2017 [YahooFinance]
Former hedge fund manager Mike Novogratz has reinvented himself as an authority on cryptocurrencies. In the past year, cryptocurrencies surged to stratospheric levels in December 2017 before crashing. But Novogratz, the founder of Galaxy Digital, still sees a bright future for the asset class.
Furthermore, Novogratz sees parallels in the recent mania surrounding cannabis stocks.
“I think the cannabis business is going to grow and it’s going to grow relatively rapidly,” he said at Yahoo Finance’s All Markets Summit. “I think the prices feel like Bitcoin and Ethereum did in December of last year.”

Private Equity Firm TPG Plans to Raise Second Social Impact Fund [DealBook]
Now TPG is preparing to start raising a second Rise fund after receiving strong interest from investors, according to people with direct knowledge of the matter who were not authorized to speak publicly about the negotiations. The Rise team has also been in talks to take over the $1 billion health care fund run by Abraaj, the troubled Dubai-based private equity firm, these people added.
TPG executives said Rise’s biggest achievement was figuring out a way to measure an investment’s benefits for society, while generating returns similar to traditional investment funds. Bill McGlashan, the Rise fund’s chief executive, declined to comment on its actual performance or on the fund-raising efforts.

Woman uses plunger to make own bus handle. [UPI]
An ingenious passenger on a bus in China was filmed making her own handle by affixing a toilet plunger to the vehicle's ceiling.
The video shows a woman boarding a bus in Huai'an City, Jiangsu Province, and looking for an available handle to hold as the bus starts to move.
The woman discovers all of the handles are in use, so she brandishes a toilet plunger and quickly suctions it to the vehicle's ceiling, making her own handle.

Related

Opening Bell: 03.02.11

Financial Crisis Amnesia (WSJ) Tim Geithner: "My wife occasionally looks up from the newspaper with bewilderment while reading another story about people in the financial world or their lobbyists complaining about Wall Street reform or claiming they didn't need the Troubled Asset Relief Program. She reminds me of the panicked calls she answered for me at home late at night or early in the morning in 2008 from the then-giants of our financial system. We cannot afford to forget the lessons of the crisis and the damage it caused to millions of Americans. Amnesia is what causes financial crises. These reforms are worth fighting to preserve." IMF Says Threat Of Sharp Global Slowdown Has Eased (Reuters) So that's nice. Life as Libor Traders Knew It Seen as Abusive by Investigators (Bloomberg) Regulators probing the alleged manipulation of global interest rates are focusing on what traders involved in setting the benchmark say were routine discussions condoned by their superiors...“A few hundred people, mostly based in one city and sitting in close proximity to each other, set an index rate for trillions of dollars of securities with little or no oversight,” said Mark Sunshine, chief executive officer and chairman of Veritas Financial Partners, a Florida-based firm that provides loans to businesses and real estate companies. “That cannot continue. The mechanism itself, the oversight and the penalties if violated, are woefully inadequate.” Twitter's Slow Road To IPO (WSJ) In just six years Twitter Inc. has become the world's digital soapbox, amassing more than 100 million monthly users—from everyday people to Lady Gaga to Middle East protesters—who use the service to spread pithy updates and breaking news. Yet despite the service's growing influence on society and culture, the business behind it still has a ways to go until it's ready for an initial public offering. To understand why, travel to Cincinnati, where last June Twitter planted a staffer blocks from Procter & Gamble Co.'s headquarters and assigned him a critical task: Teach the country's biggest advertiser to use Twitter and buy its ads. But when P&G spent $150 million to promote the launch last month of a Tide laundry detergent, the company bought magazine pages, billboard spots and television commercials during the Academy Awards—and no Twitter ads. "All [P&G] brands are asking questions about what to do with Twitter and how to leverage it; nobody really had a clear, lean answer," said the staffer, J.B. Kropp. US Seeks Dismissal Of Lawsuit On AIG Takeover (Reuters) In November, Hank Greenberg's company, Starr International Co, sued the U.S. government for $25 billion, calling the 2008 federal takeover of the insurer unconstitutional. Starr sued the government in the U.S. Court of Federal Claims in Washington, D.C., which handles lawsuits seeking money from the government. It brought that lawsuit on behalf of itself and other AIG shareholders...In a filing with the U.S. Court of Federal Claims in Washington, D.C., on Thursday, the government said although Starr may disagree with the terms to which AIG agreed, any loss resulting from that agreement should be borne by AIG and its shareholders, and not the public. Obama Back On Wall Street (Politico Morning Money) Obama raised just north of $5 million for his re-election campaign and the DNC at four events in NYC last night including a swank dinner ($35,800 per person, $71,600 per couple) at Jean-Georges Vongerichten’s ABC Kitchen on East 18th Street. The dinner, the first Wall Street-heavy event since Obama doubled down on his proposed bank tax, was hosted by a handful of the President’s stalwart industry supporters including Robert Wolf, Blair Effron, Mark Gallogly, Marc Lasry and Orin Kramer. Sex Work Among Medical Students On the Rise? (ABC) Sex work among medical students is on the rise, claims a new editorial, published in the journal Student BMJ. The UK-based publication noted that students are likely seeking extreme measures to deal with their financial hardship. One in 10 students knows of another who participated in prostitution to pay their medical student loans, according to the editorial. "Mounting evidence suggests that more university students are engaging in prostitution as a means to pay increasing tuition fees, growing debts, and high living costs," Jodi Dixon, the author of the editorial, wrote. "With escalating debts, students in the United Kingdom may view prostitution as an easy way to get rich quick." Greek Swaps Headed Back to ISDA Committee (Bloomberg) Holders of credit-default swaps on Greek bonds shouldn’t tear up their contracts after yesterday’s ruling against a payout. The International Swaps & Derivatives Association said the swaps hadn’t been triggered by the European Central Bank’s exchange of Greek bonds for new securities exempt from losses taken by private investors. The group will now probably be asked to determine whether collective action clauses, or CACS, being used by Greece to impel investors to participate in a wider exchange of bonds that would trigger the swaps. Madoff moneyman Merkin near $400M AG deal (NYP) After a bitter three-year legal battle, Ezra Merkin, the Manhattan moneyman who funneled more than $2 billion to convicted Ponzi king Bernie Madoff, is nearing a settlement with the New York attorney general that could have him shell out as much as $400 million. Sources said the settlement with AG Eric Schneiderman would recover the bulk of the $470 million in fees the notorious middleman pocketed from investing his clients’ cash with Madoff. Game Changer For Zynga: No Facebook (WSJ) The San Francisco-based company, whose offerings have long been associated with Facebook as well as apps for mobile devices such as Apple Inc.'s iPhone, said a "beta," or prerelease version of what it calls the Zynga Platform, will initially allow customers to play five of its popular titles—"CityVille," "Hidden Chronicles," "Zynga Poker," "CastleVille" and "Words With Friends"—from its website. Zynga said more of its games will become available on the website over time. Cops Ticket Woman For Resting Injured Leg On Seat In Deserted Subway Train (Gothamist) Brooklyn resident Kate Wilson was riding the D train home to Sunset Park around 1 a.m. one morning in February when several police officers entered her subway car at 36th street. The subway car was mostly empty, with plenty of empty seats, and Wilson was resting her right leg—which she had injured in a race that day—on a corner of one seat. What followed was an absurd yet all too familiar encounter with overzealous, quota-filling transit cops and ended with a $50 summons.

hamster

Opening Bell: 2.9.18

Shutdown over fast; Global stocks still getting hammered; Brexit still a mess; Florid woman mercy flushes emotional support hamster; and more!

Opening Bell: 04.25.12

Credit Suisse Sees Profit Drop (WSJ) Credit Suisse Wednesday reported a sharp drop in net profit for the first quarter, pressured by an accounting loss on its own debt and lower revenue at its investment bank, which shed risky assets to adapt to a tougher regulatory and market environment. Still, the bank managed a sharp turnaround from a dismal fourth quarter when it reported a loss, on improving market conditions. But Chief Financial Officer David Mathers warned that this may not necessarily be the trend going forward, as markets weren't as favorable in April as they were during the first quarter. Credit Suisse said net profit fell 96% to 44 million Swiss francs ($48.3 million) in the first quarter from 1.14 billion francs a year earlier. This was better than the net loss expected by analysts. Excluding a raft of one-off items, net profit would be 1.36 billion francs, Credit Suisse said. Net profit suffered from a 1.55 billion franc accounting loss on the bank's own credit. The bank also recorded costs of 534 million francs for 2011 bonuses. Moody's Hears It From Banks (WSJ) In the latest sign that U.S. banks are bridling at tighter oversight that began after the financial crisis, a handful of big lenders have been jawboning Moody's Investors Service ahead of potential downgrades expected this spring. Bank of America Corp. Chief Executive Brian Moynihan and Citigroup Inc. CEO Vikram Pandit have argued against downgrades in person, people familiar with the talks said. An executive at Goldman Sachs Group Inc. last week publicly questioned Moody's methods on a conference call with analysts and investors. Morgan Stanley CEO James Gorman, who has met with the ratings firm more often than usual in the past quarter, called Moody's decision to delay any potential downgrades by a month "constructive." Housing Declared Bottoming in U.S. After Six-Year Slump (Bloomberg) The U.S. housing market is showing more signs of stabilization as price declines ease and home demand improves, spurring several economists to call a bottom to the worst real estate collapse since the 1930s. “The crash is over,” Mark Zandi, chief economist for Moody’s Analytics Inc. in West Chester, Pennsylvania, said in a telephone interview yesterday. “Home sales -- both new and existing -- and housing starts are now off the bottom.” US taxpayers still on hook for $119B in TARP funds (MarketWatch) US taxpayers are still owed $119 billion in outstanding Troubled Asset Relief Program (TARP) funds, a watchdog for the government crisis program said Wednesday in a quarterly report to Congress. That number is down from $133 billion in TARP funds owed as of January, according to the author of the report, the Office of the Special Inspector General for the TARP. The government expects TARP to lose $60 billion. Surviving ’Taxmageddon’ Without Maiming Economy (Bloomberg) Peter Orszag: "At the end of this year, all the Bush tax cuts expire -- amounting to about $250 billion a year. The payroll-tax holiday, at more than $100 billion a year, ends too, as do expanded unemployment-insurance benefits. And we face other spending cuts of about $100 billion, from the sequester set up by the 2011 debt-limit deal. All told, this fiscal tightening adds up to about $500 billion -- or more than 3 percent of gross domestic product. The economy will be in no shape to handle that much of a squeeze. If we do nothing to reduce or stop it, the economy could be thrown back into a recession." Goose strike forces JetBlue flight into emergency landing at Westchester (NYP) Geese smacked into a JetBlue plane taking off from Westchester Airport last night, forcing the pilots to make an immediate emergency landing. “We got to come back. We hit two big geese,” a pilot aboard Flight 571 to West Palm Beach, Fla., radioed to controllers after the plane took off at 6:45 p.m. “We are declaring an emergency.” The pilots made it just six miles northwest of the airport before turning around. They were back on the ground seven minutes later. “JetBlue 571, nice to have you back,” a relieved controller radioed as the plane touched down at 6:52. The geese smashed into the jet’s windshield. “I was petrified,’’ said passenger Janice Hilbrink, of White Plains. “Seriously very frightened. “I heard the noise. It was very loud and the plane had a lot of turbulence. The pilot told us the windshield was cracked.’’ When she got off the plane, “the whole front of it was covered in bird.’’ Missing MF Global Funds Found (CNNM) Investigators probing the collapse of bankrupt brokerage MF Global said Tuesday that they have located the $1.6 billion in customer money that had gone missing from the firm. But just how much of those funds can be returned to the firm's clients, and who will be held responsible for their misappropriation, remains to be seen. James Giddens, the trustee overseeing the liquidation of MF Global Inc, told the Senate Banking Committee on Tuesday that his team's analysis of how the money went missing "is substantially concluded." "We can trace where the cash and securities in the firm went, and that we've done," Giddens said. Europe Struggles With Painful Deficit Cures (WSJ) The target, set in 2009, is still seen as an important signal that the budget rules won't be flouted as they were in the past. But meeting the 2013 goal, which for most countries was a deficit of 3% of gross domestic product, will entail more spending cuts or tax increases by governments across the EU. Soros And Roubini Take Aim At Euro Zone (CNBC) Nouriel Roubini, an economist and founder of RGE Monitor used a series of tweets on Tuesday evening to call for action on weakening the euro. “If domestic demand is going to be anemic and weak in this fiscal adjustment because of private and public sector deleveraging you need net exports to improve to restore growth,” wrote Roubini who believes much looser monetary policy is needed. “In order to have an improvement in net exports you need a weaker currency and a much more easy monetary policy to help induce that nominal and real depreciation that is not occurring right now in the euro zone,” said Roubini. “That’s one of the reasons why we’re getting a recession that’s even more severe,” he said. During a debate on Tuesday, billionaire Investor George Soros made it clear what side of the growth versus austerity debate he is on. “Europe is similar to the Soviet Union in the way that the euro crisis has the potential of destroying, undermining the European Union,” he said. “The euro is undermining the political cohesion of the European Union, and, if it continues like that, could even destroy the European Union,” said Soros. New Fashion Wrinkle: Stylishly Hiding the Gun (NYT, related) Woolrich, a 182-year-old clothing company, describes its new chino pants as an elegant and sturdy fashion statement, with a clean profile and fabric that provides comfort and flexibility. And they are great for hiding a handgun. The company has added a second pocket behind the traditional front pocket for a weapon. Or, for those who prefer to pack their gun in a holster, it can be tucked inside the stretchable waistband...The chinos, which cost $65, are not for commandos, but rather, the company says, for the fashion-aware gun owner.

Opening Bell: 11.13.15

Power shifts to bankers at Goldman; Doubleline taking market share from Pimco; Scouts in Silicon Valley; "Official Who Oversaw Public Toilet Closures Caught Peeing In Street"; and more.

Opening Bell: 04.11.13

J.P. Morgan Takes Goldman's Spot In Corporate-Governance Hot Seat (WSJ) Mr. Dimon's shareholder letter lacked the feisty tone of years past, when he often warned about the unintended consequences of a wave of new regulation of the U.S. banking industry. This year, Mr. Dimon instead said, "I feel terrible we let our regulators down" and pledged to make the firm's compliance with all regulatory obligations a priority. "We are re-prioritizing our major projects and initiatives" and "deploying massive new resources" to the effort, he wrote. The firm is dropping work on a litany of new projects, such as a redesign of its Chase.com web site, so it can focus on the new firm-wide controls, said a person close to the bank. Mr. Dimon also warned that he expects more regulatory slaps in the "coming months." Goldman Deal With Union Lets Blankfein Keep Dual Roles (NYP) CtW Investment Group, an adviser to union pension funds with $250 billion of assets, agreed to withdraw its proxy proposal seeking a split of the chairman and CEO roles after the company agreed to give Goldman’s lead director, James Schiro, new powers such as setting board agendas and writing his own annual letter to shareholders. Fed's Flub Sparks Data Concerns (WSJ) The Fed said Wednesday that a staff member in its congressional liaison office accidentally released minutes of a March 19-20 policy meeting Tuesday afternoon to many of his contacts, including Washington representatives at Goldman Sachs Group Inc., Barclays Capital, Wells Fargo & Co., Citigroup Inc. and UBS AG. Also among the recipients: King Street Capital Management, a hedge fund, and Carlyle Group, a private-equity firm. Officials at the Fed didn't notice the mistake until about 6:30 a.m. Wednesday, after which they scrambled to release the information to the wider public, which was done at 9 a.m. A Fed spokesman said: "Every indication is that [the release] was entirely accidental." While there has been no obvious sign of early trading on the Fed's minutes, the flub comes at a delicate moment and raises questions about how the central bank handles sensitive information. Fed officials are currently debating when to begin winding down an $85 billion-a-month bond-buying program, a decision that is likely to have immense market impact. Market participants eagerly await the meeting minutes, which are released every six weeks, for insight into Fed thinking about the program. Plosser pitches his plan for a post-crisis Fed (Reuters) Plosser, an outspoken policy hawk and longtime critic of the bond-buying, said the Fed would be wise to begin swapping maturing longer-term assets with shorter-term ones, aiming to hold only Treasury bonds and not the mortgage bonds it is now buying. Regulators Feeling 'Social' Pressure (WSJ) The SEC issued guidance last year saying a third party's use of the "like" button could be viewed as a testimonial and suggested investment-advisory firms consider requiring preclearance before posting on social-media sites. SEC staff are currently working on additional guidance to provide more clarity about how to use social media without violating advertising rules, but the agency is unlikely to soften its prohibition against advisers using testimonials, according to the person familiar with the matter. An SEC spokesman declined to comment. Carnival Offers Motel 6 Price for Caribbean After Triumph (Bloomberg) Carnival Corp is offering a Caribbean cruise for as little as $38 a night, less than a stay at Motel 6, after an engine fire on the Triumph stranded passengers at sea for several days. A four-night trip on Carnival’s Imagination, leaving Miami on April 22, costs $149 a person, including meals and some beverages, according to the cruise company’s website yesterday. The lowest nightly rate at the budget-priced Motel 6 chain was $39.99, according to an online ad. Carnival, based in Miami, generated headlines worldwide in February after the engine fire on the Triumph left 3,100 passengers at sea for several days with limited food and toilet service. The ship broke loose from its moorings in high winds last week in Mobile, Alabama, where it is being repaired. Cyprus Central Bank Denies Plan to Sell Gold (CNBC) The Central Bank of Cyprus denied that it will sell 400 million euros ($525 million) worth of its gold reserves as part of the conditions to Europe's bailout of the island state. Aliki Stylianou, a spokesperson at the central bank told CNBC on Thursday that there was "no such thing being discussed." Jobless Claims In US Plunged More Than Forecast Last Week (Bloomberg) Jobless claims decreased by 42,000 to 346,000 in the week ended April 6, from a revised 388,000, Labor Department figures showed today in Washington. The median forecast of 49 economists surveyed by Bloomberg called for a drop to 360,000. A Labor Department official said no states were estimated and there was nothing unusual in the data. Citadel’s Credit Co-Head Jamey Thompson Quits Hedge Fund (Bloomberg) Thompson became one of the three co-heads of Citadel’s credit group in September, when the hedge fund merged its quantitative credit and convertible-bond teams. He started at Citadel in 2008 as a credit portfolio manager and had previously worked at New York-based hedge fund King Street Capital Management LP. $100,000 worth of burgers stolen in Linden, NJ (MCJ) Capt. James Sarnicki said police responded Tuesday to BMG Logistics, a shipping yard at 720 W. Edgar Road, for a report of a shipping container theft. The owner told police that sometime between 8 p.m. April 8 and 10 a.m. April 9, someone stole a 40-foot-long refrigerated shipping container from the lot containing $100,000 worth of hamburger patties bound for the Netherlands. Detective Frank Leporino said the burgers had been shipped from Kansas City, Mo., and brought to the warehouse and shipping yard before being loaded onto a container Monday. The container was stored in a 2006 trailer with a California license plate 4HR1817. The burger patties were stored in 3,000 cartons. Police have surveillance video footage of the tractor hooked up to the trailer going out of the shipping yard at about 10:33 p.m. Monday.

Opening Bell: 10.10.12

Banks Must Cut Deeper to Help Stock Prices, McKinsey Says (Bloomberg) Banks must make deeper and more sweeping cost reductions if they want to restore profitability levels that are acceptable to investors, McKinsey & Co. said in an annual review of the industry. “It has to go a lot further,” Toos Daruvala, a director in the consulting firm’s North American banking practice and a co-author of the report, said yesterday in a phone interview. “Banks have done quite a lot on cost-cutting but frankly the environment has deteriorated over the last year” because of economic weakness, he said. Argentina rejects Singer’s $20M in ransom for ship’s release (NYP) At a court hearing today in Ghana, where hedge fund manager Paul Singer’s lawyers are holding the ARA Libertad hostage, a lawyer for Argentina argued that Singer had no right to detain the ship because it’s a military vessel and immune from seizure. Lawyer Larry Otoo called the seizure — a move by Singer to force Argentina to repay a $1.6 billion debt he says he’s owed — an embarrassment to Ghana and demanded the ship’s immediate return. The court is expected to rule Thursday on whether to release the ship. Singer, the head of hedge fund giant Elliot Management, is seeking to recoup some of the $600 million in bonds he purchased as Argentina was headed for default in 2001. Elliot bought the bonds at steep discounts, paying as little as 15 cents on the dollar in some cases, but has since won judgments of as much as $1.6 billion. Elliot’s NML Capital unit is pursuing Argentina’s assets all over the world in an effort to collect on its debt. In Gupta Sentencing, A Judgment Call (WSJ) Former Goldman Sachs Group Inc. director Rajat Gupta is the highest-profile of more than 70 defendants convicted of insider trading in New York federal court in the past three years. But this month he will likely receive a more lenient sentence than the 11-year-prison term given to Raj Rajaratnam, to whom Mr. Gupta provided his illegal leaks, legal experts say. The sentence may have reverberations beyond the 63-year-old Mr. Gupta, a former chief of consulting giant McKinsey & Co. It will be widely watched in executive suites nationwide because it will be among the first handed down to a major corporate figure in the recent insider-trading crackdown. Previous sentences have largely involved traders, lawyers, lower-rung corporate employees and others. Mr. Gupta, who was convicted in June of three counts of securities fraud relating to tips about Goldman and one count of conspiracy, didn't trade or profit directly from his illegal tips. Before the conviction, he had a long and stellar career in corporate America and philanthropy. All this will be balanced against the nature of the crimes and the need to discourage others from similar offenses when U.S. District Judge Jed Rakoff hands down his sentence, scheduled for Oct. 24. Judge Rakoff often imposes sentences further below federal sentencing guidelines than some other judges do, according to a Wall Street Journal analysis...Since 2010, Judge Rakoff has imposed an average sentence of 21 months on insider-trading defendants who didn't cooperate with prosecutors—about 38% below the guideline minimum, according to the Journal analysis. By comparison, U.S. District Judge Richard Sullivan issued seven sentences in that period averaging 6.3% below the guideline minimum. U.S. District Judge Paul Crotty issued three sentences at 20.3% less than the minimum. Goldman Pushes On Limits In Volcker Rule (WSJ) Some executives at the New York company believe they have found a way to extricate the credit funds from proposed limits on how much can be invested in hedge funds and private-equity funds, according to people briefed on the efforts. The Volcker rule caps a bank's total investments in hedge funds and private-equity funds at 3% of its so-called Tier-1 capital. It also prevents any single bank from accounting for more than 3% of a fund's investments. Those limits are among the biggest components of the rule, named after former Federal Reserve Chairman Paul Volcker and designed to curtail risk-taking among financial firms. The rule is the most contentious part of the Dodd-Frank financial-overhaul law of 2010 but, like much of the rest of the legislation, the details of its implementation are still being worked out. Credit funds lend to companies that might not otherwise get financing, such as companies backed by private-equity firms, and tend to hold their investments to maturity while using a limited amount of leverage. Goldman has argued in meetings with regulators and in letters to them that these funds function like banks, just with a different structure, according to public records and the people familiar with the efforts. Report: 20% of US Firms Cook the Books During Earnings (CNBC) ...a new report by finance professors at Emory and Duke University raises questions about the quality of earnings in general. In an anonymous survey of CFOs last year, the study found that at least 20% of companies are "managing" earnings and using aggressive accounting methods to legally alter the outcome of their earnings reports. Of the 20% of companies that manipulated their earnings to hit a target, Graham says, a surprising 40% did so to the downside, not the upside, to pad and improve future quarters' earnings. Banks Chasing Asian Millionaires Create Singapore’s Canary Wharf (Bloomberg) Singapore’s Marina Bay area is emerging as the city’s new financial hub, with banks including Standard Chartered Plc and Barclays taking bigger offices as they pursue Asia’s expanding ranks of millionaires. Corrections & Amplifications (WSJ via Lauren Tara LaCapra) "Annie Hubbard, the woman appearing alongside Goldman Sachs's chief financial officer, Harvey Schwartz, in a photograph with a page-one article about Goldman on Tuesday, was incorrectly identified as his wife. Mr. Schwartz isn't married." Hulk Hogan ‘devastated’ by leak of sex tape filmed six years ago with friend’s wife Heather Clem (NYDN) The wrestling star tried to explain the kinky love triangle to Howard Stern Tuesday using a thinly veiled euphemism. “Let’s say I’ve been doing laundry, brother, for this person forever, and all of a sudden this person hates the way I do laundry. And that person says, ‘You suck. I hate you. F-you every single day. I hate the way you do laundry. I’m going to find somebody else to do laundry. Somebody younger, faster, stronger,’” he said, clearly taking a jab at his ex-wife, who he was still married to at the time of the taping. “But my buddy, you know, him and his girl say, ‘Hey, you can do our laundry any time you want!’ Both of them are saying that,” he told Stern. “Finally after the person I was doing laundry with for millions and millions of years left, and all of a sudden there was nobody there to do laundry, I was depressed… I go to my buddy’s house and he says, ‘Hey man you can do this other person’s laundry that I’m partners with.’ I said, 'Sure.’” Official Warmth And Public Rage For A German Leader In Athens (NYT) ...even as Ms. Merkel said that she had come as a “good friend and a real partner,” not a “taskmaster or teacher to give grades,” the approximately 40,000 Greeks who took to the streets in protest (a rather modest number, by Greek standards) treated the visit as a provocation by the arch-nemesis in the euro crisis whose austerity medicine is obliterating the Greek middle class. Some banners read “Don’t cry for us Mrs. Merkel” and “Merkel, you are not welcome here.” A small group of protesters burned a flag bearing the Nazi swastika, while a handful of protesters dressed in Nazi-style uniforms drew cheers of approval as they rode a small vehicle past a police cordon. Variety Being Sold To Penske, Third Point (Reuters) Variety, the century-old entertainment trade newspaper once considered the bible of the movie industry, is being sold to online publisher Jay Penske and Third Point LLC for about $25 million, two sources with knowledge of the deal told Reuters. Penske and Third Point have struck a deal to buy the money-losing, 107-year-old newspaper from medical and technical publisher Reed Elsevier, which put it up for sale in March, the sources said. IMF warns eurozone on capital flight (FT) In its global financial stability report, the IMF concluded that capital flight from the eurozone’s periphery to the bloc’s core, driven by fears of a break-up of the currency union, had sparked “extreme fragmentation” of the euro area’s funding markets. The fund said this was causing renewed pressure for banks to shrink their balance sheets, particularly those in countries with fiscal woes. A Fat, Mustachioed Orphan Finds a Home (NYT) How do you transport a 234-pound baby to New York City? If he’s a 15-week-old walrus rescued from the open ocean off Alaska, the answer is a jumbo-size crate aboard a FedEx cargo jet, accompanied by a veterinarian and a handler. “If he’s calm and comfortable, no worries,” said Jon Forrest Dohlin, director of the New York Aquarium, which will receive the walrus calf, named Mitik, on Thursday. “But his needs and comfort come first. So he may very well travel with his head in our keeper’s lap.” Since late July, Mitik and a second orphaned walrus, Pakak, have been nursed to health with bottle feedings and exercise at the Alaska SeaLife Center, an aquarium in Seward that conducts research and responds to strandings of marine mammals. (Pakak, nicknamed Pak, will arrive at the Indianapolis Zoo on Thursday.) Mitik — or Mit, for short — was weak from illness and considerably smaller than Pakak when he was found by a hunting vessel several miles offshore. Mit initially suffered from bladder problems and could not take a bottle, requiring both a catheter and feeding tube. But he is now sucking assertively from a bottle and putting on a pound a day...With his multiple chins and doleful expression, Mit is also exhibiting an undeniable pluck that should serve him well in his new surroundings. Martha Hiatt, the aquarium’s behavioral husbandry supervisor, traveled to Alaska in September to help care for him. At first, she said, Pakak totally dominated him, but no longer. “If Mit is resting with his head on my lap, sucking my fingers, looking sweetly into my eyes, and Pak comes anywhere near us, he pops up, yells at Pak and tries to head-butt him,” she said. “Then he’ll turn to me and be all cuddly again. We say he is small, but scrappy — the perfect New Yorker.”

Opening Bell: 04.02.12

Greece Faces Bond-Swap Holdouts (WSJ) The majority of investors holding foreign law Greek bonds haven't yet been included in the country's debt-swap deal as they have rejected or failed to agree to the exchange, said the country's debt agency Monday, setting a new deadline for the offer. Financiers and Sex Trafficking (NYT) "THE biggest forum for sex trafficking of under-age girls in the United States appears to be a Web site called Backpage.com. This emporium for girls and women — some under age or forced into prostitution — is in turn owned by an opaque private company called Village Voice Media. Until now it has been unclear who the ultimate owners are. That mystery is solved. The owners turn out to include private equity financiers, including Goldman Sachs with a 16 percent stake. Goldman Sachs was mortified when I began inquiring last week about its stake in America’s leading Web site for prostitution ads. It began working frantically to unload its shares, and on Friday afternoon it called to say that it had just signed an agreement to sell its stake to management. 'We had no influence over operations,' Andrea Raphael, a Goldman Sachs spokeswoman, told me." Bond King's Trade Pays Off (WSJ) After suffering one of his worst performances ever in 2011, over the past three months, Bill Gross, manager of Pacific Investment Management Co.'s Total Return Fund, rode an aggressive bet on mortgage bonds to beat most of the fund's rivals and the index against which bond-fund managers measure themselves. Mr. Gross's fund, the world's biggest bond fund with $252 billion in assets, recorded a 2.88% return in the three months through March. The performance beat the benchmark Barclays Capital Aggregate Bond Index by 2.58 percentage points, ranking in the top 11% of all bond mutual funds for the quarter, according to investment-research firm Morningstar Inc. In Wake of Groupon Issues, Critics Wary of JOBS Act (WSJ) A little-noticed provision in the new JOBS Act would allow companies to iron out disagreements with regulators behind closed doors before they go public—a provision that might have prevented investors from finding out about Groupon Inc.'s early accounting questions until after they had been resolved...Critics say that measure would allow a company like Groupon, which had well-publicized disagreements with the SEC over its accounting last year, to resolve such issues under the radar, without investors learning of them until later although still before any IPO. Goldman Eyes $3 Billion Property Debt Fund (Reuters) A private equity arm of Goldman Sachs is looking to launch a $3 billion property debt fund in a bid to take advantage of a growing shortage of real estate financing across the UK and Europe...Real Estate Principal Investment Area (REPIA) is exploring options to create a fund that would provide senior and mezzanine loans to property investors, and will target property lending that is riskier but which would offer higher potential returns. Md. woman won't share $105M lotto jackpot with McD's co-workers (NYP) Workers at the fast-food joint who pooled their cash for tickets are furious at a colleague who claims she won with a ticket she bought for herself and has no intention of sharing. “We had a group plan, but I went and played by myself. [The ‘winning’ ticket] wasn’t on the group plan,” McDonald’s “winner’’ Mirlande Wilson 37, told The Post yesterday, insisting she alone bought one of the three tickets nationwide that will split a record $656 million payout...[On Saturday], a delirious Wilson had called co-workers to break the news — tellingly used the first-person singular. “I won! I won!” she cried, Allen said. Another colleague, Davon Wilson, no relation, said he was there when Mirlande Wilson called. “She said, ‘Turn on the news.’ She said she had won. I thought it was a joke or something. She doesn’t seem like a person who’d do this,” he said. Allan said he and Layla went to Wilson’s home and pounded on the door for 20 minutes until she finally came out. “These people are going to kill you. It’s not worth your life!” Allen said he told her. “All right! All right! I’ll share, but I can’t find the ticket right now,” she finally said, according to Allen. Resistance to austerity stirs in southern Europe (Reuters) An unexpectedly broad general strike in Spain on Thursday and mounting opposition to Prime Minister Mario Monti in Italy are among indicators that resistance is growing in a region at the center of concerns about a resurgence of the euro zone debt crisis. Biggest Bond Traders See Worst Over for Treasuries (Bloomberg) Signs of strength in the economy, which caused a 5.56 percent loss in bonds maturing in 10 years or more last quarter, may fade in the second half of 2012, the dealers say. Tax cuts are expiring, $1 trillion of mandatory federal budget cuts are due to kick in and $100-a-barrel oil is eating into consumer spending. With inflation in check, Fed Chairman Ben S. Bernanke said last week that the central bank will consider further stimulus, even after upgrading its economic outlook March 13. Marc Faber: "Massive Wealth Destruction Is About To Hit Investors" (CNBC) FYI. Twitter takes Connecticut official's April Fools' Day joke to the public (NHR) It all started with a tweet at 5:30 a.m. Sunday, from state government official Mike Lawlor: “Rep. Dargan in hospital following accident.” By 11 a.m., news organizations statewide, including the NewHaven Register, were retweeting the “news” and calling officials to confirm details of the accident. After all, it was assumed, it must be accurate if the tweet came from the highly respected Lawlor, a former longtime state representative and now the state’s undersecretary for Criminal Justice Policy and Planning. But no... Dargan was reached by phone and confirmed he was fine and did not have an accident. “I am fine. Lawlor must have tweeted it.