Opening Bell: 10.10.18

Another hurricane coming; Sears considering giving up; Bloomberg's running; Greece institutes "No fatties on donkeys" rule; and more!
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Strengthening to Category 4, Hurricane Michael Aims at Florida [NYT]
The National Hurricane Center said that the storm had maximum sustained winds of 130 miles per hour. Emergency declarations were issued for parts of Alabama, Florida and Georgia, and the authorities ordered tens of thousands of people to evacuate as they opened storm shelters and shut down schools.
“Hurricane Michael is a monstrous storm, and the forecast keeps getting more dangerous,” Gov. Rick Scott of Florida said during an appearance on Tuesday at the state’s emergency operations center in Tallahassee, the state capital.

Sears arranges financing for a potential bankruptcy filing [CNBC]
The so-called "debtor-in-possession" loan, which companies need to have enough liquidity to keep running the business during bankruptcy, is the clearest sign yet that the department store chain may finally file after years of losses and speculation. Sears has a $134 million debt payment due Monday that it previously said it may not be able to cover.
A bankruptcy is not yet definite and still could be averted. Sears' CEO, Eddie Lampert has kept the company afloat through financial maneuvering and pouring his own money into the company. He may choose again to do so.

Powell Places Risky Bet as He Stokes Too-Good-to-Be-True Economy [Bloomberg]
In recent public appearances, Powell has argued that the Fed can countenance a fall in joblessness to an almost 50-year low without triggering an inflationary surge in large part because Americans believe the central bank will keep prices under wraps. “The key is the anchored expectations,” he said last week.
The problem is that it’s not easy to divine what inflation beliefs are and how they might change. What’s more, there’s no measure of where companies -- arguably the most important players in setting prices -- expect the cost of living to go. That makes Powell’s focus on price expectations a potentially risky move as the Fed gradually raises interest rates.

Exclusive: Bank of England plots action plan to steer lenders through 'no-deal' Brexit - source [Reuters]
The Bank of England has asked UK-based lenders to provide six-hourly health-checks on their balance sheets in the days after a possible ‘no-deal’ Brexit as it seeks to avert a shock squeeze in credit supply to the economy, a senior industry source said.
The checks would cover deposits, loans, currency and derivative exposures as well as any changes in the cost of funding and lending rates, the source told Reuters.

SoftBank Explores Taking Majority Stake in WeWork [WSJ]
The investment could total between $15 billion and $20 billion and would likely come from SoftBank’s Vision Fund, some of the people said. The $92 billion Vision Fund, which is backed largely by Saudi Arabia and Abu Dhabi wealth funds as well as by SoftBank, already owns nearly 20% of WeWork after last year committing $4.4 billion in equity funding at a $20 billion valuation.
Talks are fluid and there is no guarantee there will be a deal, some of the people said.
SoftBank and WeWork this summer were discussing a smaller investment that would value WeWork at up to $40 billion, The Wall Street Journal reported in June.

Barry Diller’s IAC hits back at Tinder co-founder’s $2B suit [NY Post]
That’s what the billionaire media mogul’s conglomerate IAC/InterActiveCorp claimed on Tuesday, denying allegations that it bamboozled ex-Chief Executive Sean Rad and other Tinder founders out of valuable stock options last year.
Rad, who was dismissed as Tinder CEO in late 2016, claimed last month in an explosive lawsuit that IAC swindled him and other Tinder co-founders out of $2 billion by lowballing the app’s value as it calculated the price of their stock options.

Michael Bloomberg Registering as Democrat as He Weighs 2020 Bid [Bloomberg]
Bloomberg, 76, has been a political independent since abandoning his Republican Party registration in 2007. He has said he is considering running for president as a Democrat -- making this one of his most overt moves to date toward a possible White House campaign.
“Today, I have re-registered as a Democrat -- I had been a member for most of my life -- because we need Democrats to provide the checks and balance our nation so badly needs,” Bloomberg said.

Greece BANS fat tourists from riding donkeys after animals are 'crippled by obese holidaymakers' [Mirror]
Earlier this year, images were released of donkeys climbing the narrow steps on the stunning Greek island of Santorini - laden down by obese holidaymakers.
Now, the country's Ministry of Rural Development and Food has published a new set of regulations stating the donkeys giving tourist rides in Santorini should not carry any loads heavier than 100kg, or one fifth of their weight.
The move comes after animal activists on the island claimed with obesity on the rise, donkeys were being forced to carry ever-heavier loads while they work long hours, seven days a week without shelter, rest and water - leaving them with spinal injuries and open wounds from ill-fitting saddles.

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Opening Bell: 06.21.12

SEC Said To Depose SAC’s Cohen In Insider-Trading Probe (Bloomberg) Cohen, 56, was recently deposed by Securities and Exchange Commission investigators in New York about trades made close to news such as mergers and earnings that generated profits at his hedge fund, said one of the people, who asked not to be identified because the investigation isn’t public. Neither Cohen nor SAC Capital, which oversees about $14 billion, has been accused of wrongdoing. Four-Week Jobless Claims Average Reaches 2012 High (Reuters) Initial claims for state unemployment benefits slipped 2,000 to a seasonally adjusted 387,000, the Labor Department said. The prior week's figure was revised up to 389,000 from the previously reported 386,000. Lawmakers Call For IPO Overhaul (WSJ) A bipartisan group of lawmakers called on regulators to overhaul the way initial public offerings are conducted, concerned that last month's flubbed stock sale by Facebook shows the current system unfairly punishes small investors. In a letter to Securities and Exchange Commission Chairman Mary Schapiro, Rep. Darrell Issa (R., Calif.) prodded the agency to revamp rules for pricing and disclosure in IPOs. Mr. Issa, who wrote the letter on behalf of the House Oversight and Government Reform Committee, said the social-networking company's steep share-price decline since its May 18 offering is a sign that investment banks are able to "dictate pricing while only indirectly considering market supply-and-demand." Separately, the Democratic chairman of a subcommittee of the Senate Banking Committee said regulatory changes are needed to bolster investor confidence sapped by Facebook's botched debut. Facebook’s 22% Rally Helps Stock Avoid Worst IPO Return In U.S. (Bloomberg) So that's something! Riskier Bets Pitched To Asia's Rising Rich (WSJ) In Japan, brokers are dangling what they claim is a tasty product in front of wealthy investors: a "triple-decker" that uses options to squeeze higher returns from stocks, "junk" bonds or other assets. If a triple-decker doesn't suit an investor's fancy, there is the increasingly popular—and slightly less complex—"double-decker." Elsewhere in Asia, so-called hybrid bonds and other high-yield varieties can be had. Investors in Singapore recently could buy so-called perpetual bonds through ATMs. Across Asia, brokers are pushing to sell increasingly complex products to the region's expanding ranks of investors, especially wealthy ones. These types of products appeal to those hungry for yield who normally focus on stocks and real estate but are worried about falling equity markets and the sudden shortage of initial public offerings. BlueMountain Said To Help Unwind JPMorgan’s Whale Trades (Bloomberg) A hedge fund run by a former JPMorgan Chase executive who helped create the credit- derivatives market is aiding the lender as it unwinds trades in an index at the heart of a loss of more than $2 billion. BlueMountain Capital Management LLC, co-founded by Andrew Feldstein, has been compiling trades in Series 9 of the Markit CDX North America Investment Grade Index in recent weeks, then selling the positions to the New York-based bank, according to three people outside the firms who are familiar with the strategy. JPMorgan tapped BlueMountain as a middleman after trades in its London chief investment office grew so large that the bank was creating price distortions that hedge funds sought to exploit, said the market participants, who asked not to be identified because they weren’t authorized to discuss the trades. BlueMountain was one of the funds that benefited from the price dislocations, the people said. US Olympic committee send cease and desist letter to knitting Olympics (TNT) The US Olympic committee has sent a cease and desist letter to the social networking group Ravelry, who had organised a Ravelympics in which contestants would compete in events such as ‘scarf hockey’ while watching the actual Games on TV...The US Olympic Committee has said that “the athletes of Team USA have spent the better part of the entire lives training for the opportunity to compete at the Olympic Games and represent their country in a sport that means everything to them” and that “using the name ‘Ravelympics’ for a competition that involves an afghan marathon and sweater triathlon tends to denigrate the true nature of the Olympic Games”. Romney Campaign Said To Ask Scott To Downplay Job Gains (Bloomberg) Mitt Romney’s presidential campaign asked Florida Governor Rick Scott to tone down his statements heralding improvements in the state’s economy because they clash with the presumptive Republican nominee’s message that the nation is suffering under President Barack Obama, according to two people familiar with the matter. Scott, a Republican, was asked to say that the state’s jobless rate could improve faster under a Romney presidency, according to the people, who asked not to be named. Lonely Hedge Fund Bullish On Greece Tries To Woo Investors (Bloomberg) In March, Elliott met with the investment chief of a family office in London who said within seconds of sitting down that the firm had no interest in giving money to a hedge fund wagering on Greece. The executive merely wanted to hear his story, Elliott, the founder of Naftilia Asset Management Ltd., said in a telephone interview from his office in Athens. Elliott, 39, responded by asking a few questions of his own, including whether the executive had invested in Russia after its 1998 currency crisis, in Argentina 10 years ago after the nation defaulted on its debt or in the Standard & Poor’s 500 Index (SPX) in March 2009, when the benchmark plunged to its lowest point in 13 years. Finally, Elliott questioned whether the family office’s investment chief had ever bought shares of Apple. In all cases, the answer was no. “Then you are not qualified to be discussing Greece with me because you have missed the best investment opportunities over the past 20 years,” Elliott retorted. National Bank Of Greece To Sell Luxury Resort As Slump Bites (Bloomberg) If you know anyone who's interested: The 3.3 million-square-foot (307,000 square-meter) Astir Palace complex has already drawn investors’ interest, according to Aristotelis Karytinos, general manager of real estate at the lender. The Athens-based bank and Greece’s privatization fund, which owns part of the property, will put out a public tender in coming months, he said. Fed Warns Of Risk To Economy (WSJ) Fed Chairman Ben Bernanke made clear in a news conference after the policy makers' meeting that he is prepared to take further action if he doesn't see progress on bringing down unemployment, which was 8.2% in May. "I wouldn't accept the proposition though that the Fed has no more ammunition," Mr. Bernanke said. He added, "if we don't see continued improvement in the labor market we'll be prepared to take additional steps." Australian mega-brothel gets go-ahead (AP) A Sydney brothel has received the green light for a multi-million-dollar expansion which will see it become Australia's largest sex premises, with rooms featuring multiple beds and pool tables. Plans to double the number of rooms at inner Sydney's "Stiletto" into a mega-brothel complex were knocked back late last year by the city council on the grounds that it was too big. But the owners won an appeal to the Land and Environment Court this week, with Commissioner Susan O'Neill ruling the Aus$12 million ($12.2 million) development, including a wing for group bookings, should go ahead...Stiletto promotes itself as "the world's finest short-stay boutique hotel and Sydney brothel". Its standard hourly rate of Aus$370 includes room, lady of choice and beverages.

Opening Bell: 03.14.13

US Probes Gold Pricing (WSJ) The Commodity Futures Trading Commission is examining the setting of prices in London, in which a handful of banks meet twice daily and set the spot price for a troy ounce of physical gold, the people said. The CFTC is looking at issues including whether the setting of prices for gold—and the smaller silver market—is transparent. No formal investigation has been opened, the people said. US And UK Tussle Over Trader (WSJ) Officials in the U.S. Justice Department and the U.K. Serious Fraud Office clashed late last year in their mutual pursuit of Tom Hayes, the former UBS trader who is viewed by prosecutors in both countries as a ringleader of banks' attempts to rig the London interbank offered rate, or Libor, these people said. While jurisdictional disputes among law enforcement agencies aren't unusual, some U.S. officials worry that the friction on this case will jeopardize trans-Atlantic cooperation on future financial-fraud investigations. The spat revolves around a sequence of events that played out in rapid succession last December. The trouble began, the people said, when the U.K. government unexpectedly blocked a Justice Department request to interview Mr. Hayes, who is British and lives outside London. Then, without notifying the U.S., British fraud prosecutors on Dec. 11 arrested Mr. Hayes and two others in connection with their own probe—infuriating American officials, according to people familiar with the U.S. investigation. The U.S. prosecutors punched back the next day by filing sealed criminal fraud charges against Mr. Hayes. Banks Bow To New York On Clawbacks (WSJ) Three more top banks, including Citigroup, will broaden their clawback policies to cover more executives, increase disclosures or add potential triggers. The moves increase to six the number of leading financial companies that have bowed to pressure from the New York City's Comptroller's Office. Lehman Judge Allows 'London Whale' Subpoena in JP Morgan Fight (Dow Jones) A judge on Wednesday said Lehman Brothers Holdings Inc. creditors can subpoena Bruno Iksil in its lawsuit against J.P. Morgan, ensuring the phrase "London Whale" will stay in the lexicon for at least a bit longer. Judge James Peck of U.S. Bankruptcy Court in Manhattan said Mr. Iksil, who is in France, can be questioned over the alleged mismarking of $273.3 million in derivatives when he worked at J.P. Morgan in the days leading up to Lehman's bankruptcy. "I consider it inappropriate except for in a clear case of abuse to cut off discovery of a witness that has fingerprints all over a transaction," Judge Peck said. "And in this case, Mr. Iksil's fingerprints are on the $273.3 million transaction that took on some significance in the case." Lehman U.K. Wins $1 Billion Appeal on Hedging Contracts (Bloomberg) The ruling may result in London-based Lehman Brothers International Europe and its administrators PricewaterhouseCoopers LLP receiving an extra $1 billion, according to a written decision handed down this morning by Judge Mary Arden in the U.K. Court of Appeals. Jobless Claims Unexpectedly Fall as Labor Market Improves (Bloomberg) First-time jobless claims fell by 10,000 to 332,000 in the week ended March 9, the fewest since mid January, according to data today from the Labor Department in Washington. The median forecast of 49 economists surveyed by Bloomberg called for an increase to 350,000. The four-week average declined to a five- year low. JPMorgan exec sued over 'bullying' behavior (NYP) Plaintiff Walter Suarez, a former financial adviser, was banished to the company’s Delancey Street outpost when he complained about colleague Michael Quach, and the move cost Suarez an $80 million client list, $20 million of which was taken by JPMorgan, his lawyers claim. According to Suarez, Quach was a bully who resorted to physical violence to intimidate colleagues. Suarez, who is Hispanic, says Quach, an Asian-American, got away with the behavior because bosses preferred Asian employees. “Eventually, it got to the point of being ridiculous. This isn’t the corner bodega,” Suarez told The Post. “We’re investment people. This is a professional setting. That’s when I spoke up. “He just wasn’t a very professional person from the get-go, and I don’t think that I was the only person who felt that way.” Suarez told superiors that Quach had manhandled several staffers, including one woman who was “physically assaulted during working hours on the banking floor,” according to the lawsuit filed in Manhattan Supreme Court by attorneys Matthew Blit and Amanda Gudis. Suarez said Quach even threatened to punch him out in front of clients. 'Canada's Warren Buffett' Interested in Greece's Top Bank (Reuters) Greece's biggest lender, National Bank (NBG), said on Wednesday that Canadian investment fund Fairfax Holdings was interested in acquiring a stake in it by taking part in a planned recapitalization. Under the terms of cash-strapped Greece's international bailout, its top four lenders must issue new shares by the end of April to replenish their capital after the losses they suffered in the debt crisis from bad loans and bond writedowns. The European Union and the International Monetary Fund have set aside 27.5 billion euros ($37 billion) in bailout funds to invest in the new bank shares. But private investors must buy at least 10 percent of them or the lenders will be nationalized. NBG said in a bourse filing that Fairfax was among other investors who had expressed an interest, without giving details. Fairfax is controlled by investment guru Prem Watsa, known as the "Warren Buffett of Canada." SandRidge Gives In, Settling Proxy Fight (WSJ) SandRidge Energy agreed to fire its chief executive or give control of its board to an activist shareholder, settling a closely watched proxy battle amid an outbreak of investor unrest in the oil patch. SandRidge, an oil-and-gas producer with a stock-market value of about $3 billion, immediately appointed four directors to its board who were nominated by hedge fund TPG-Axon Capital LP, which owns 7.3% of its shares. Bofa Battles Credit Suisse for 50% Markups on State Loans (Bloomberg) The firms are among at least five lenders in talks to loan five states at least $6.5 billion this year -- more than double last year’s total -- as local governments seek to chop debt costs by replacing loans from a 1997 federal bailout that average 14.4 percent in reais. Credit Suisse is lending Mato Grosso, an agricultural state in western Brazil, $1 billion for 15 years. The loan, with a rate equal to 11.2 percent in reais and guaranteed by Brazil if Mato Grosso defaults, compares with 7.35 percent for yields of similar-maturity government debt. Private Equity Could Trigger Another Crisis: Bank of England (CNBC) The amount of leverage in the U.K. corporate sector poses a risk to the stability of the financial system and could produce the next big financial crisis over the coming years, the U.K.'s central bank has warned. White Rock woman holds 'Lying Cheating Sale' to sell all her husband's stuff while he's 'gone with his floozie' (The Province) A scorned White Rock woman held a yard sale on the weekend to get rid of her husband's stuff while he was "gone with his floozie," according to a Craigslist ad. "Husband left us for a piece of trash, selling everything while he is gone this weekend with his floozie," read the text of the ad, which was posted early Friday afternoon to the free classifieds site. The Province dropped by the yard sale on Saturday and, sure enough, bargain-hunters were sifting through the goods which included office chairs, camping gear and other offerings. The lady in charge of the sale declined to speak on the record. Her colourful Craigslist ad, however, said she was selling everything and moving after 10 years of marriage. The featured items included his favourite red leather reclining theatre-seating sofas, and "lots of tools which he didn't have a clue how to use." "I want the house empty on Monday when he returns because that will be a shock for him to see. So come pick out what you would like Saturday and Sunday at 8 a.m. "Don't come too early (like he did) because I will be thoroughly enjoying some wine with my girlfriends this evening as we clean out all this stuff and likely be nursing hangovers in the morning. So please speak softly to the ladies wearing the sunglasses." The ad discouraged clothes-buyers, "as we will have already burned those in the driveway," but it did offer to let visitors see the pile of ashes.

Opening Bell: 08.23.12

Fed Moving Closer To Action (WSJ) The Federal Reserve sent its strongest signal yet that it is preparing new steps to bolster the economic recovery, saying measures would be needed fairly soon unless growth substantially and convincingly picks up. Minutes released Wednesday from the Fed's July 31-Aug. 1 policy meeting suggested that a new round of bond buying, known as quantitative easing, was high on its list of options. Jobless Claims In U.S. Climb For Second Week To One-Month High (Bloomberg) Jobless claims rose by 4,000 for a second week to reach 372,000 in the period ended Aug. 18, Labor Department figures showed today in Washington. The median forecast of 41 economists surveyed by Bloomberg called for 365,000. The four-week moving average, a less volatile measure, increased to 368,000. SAC Takes New Activist Role (NYP) The move is being spearheaded by SAC portfolio manager David Rosen, who has been butting heads with Spokane, Wash.-based Clearwater Paper Corp. since May, sources said. In May, Rosen penned a letter to Clearwater Chairman and CEO Gordon Jones calling the stock “deeply undervalued.” Last week, SAC, which has a 7.1 percent stake in the papermaker, proposed to Clearwater’s board that the company split itself in two and consider selling one or both parts. “We continue to carefully analyze their ideas, and we look forward to continuing a dialogue,” a Clearwater spokesman said. People familiar with Rosen’s plans say Clearwater won’t be the last, and that Rosen and SAC analyst Shoney Katz are scouting out more opportunities to make money through corporate cage-rattling. “My understanding is that Rosen’s portfolio has expanded its mandate to include activism,” said Ken Squire of activist research firm 13D Monitor. Citigroup Slams Nasdaq's Facebook Compensation Plan (Reuters) Citigroup slammed Nasdaq OMX Group's plan to compensate firms harmed by Facebook's botched market debut to the tune of $62 million, saying in a regulatory filing the exchange should be liable for hundreds of millions more, according to a letter seen by Reuters. Citi said Nasdaq's actions in the May 18 initial public offering amounted to "gross negligence," in the letter to the U.S. Securities and Exchange Commission, which had not yet been made public. Facebook Director’s Quick $1 Billion Share Sale Lacks Precedent (Bloomberg) While venture capitalists commonly sell their stakes after helping startups reach the public markets, they usually whittle their holdings over a period of quarters or even years. That’s to avoid flooding the market with too much new stock, which can drive down the shares, and to show continuing support for the company. Thiel’s timing was particularly precarious, because Facebook was already down about 50 percent from the IPO. “With the benefit of hindsight, you could say that the underwriters probably regret agreeing to an early release of the shares,” said Ted Hollifield, a partner at Alston & Bird LLP in Menlo Park, California, and an expert in venture capital. “The stock still seems to be searching for an actual trading range and you would ideally like to see that take place before there’s additional selling pressure.” The Morning After: A Wedding Album With A Different Spin (NYDN) Wedding photographers are being invited to an unusual kind of afterparty. Brides and grooms — who already often obsessively document their first kiss, first cake slice and first dance — are adding yet another first to their wedding photographer’s list: the morning after. Sexy shoots featuring rumpled beds and steamy showers are a hot new trend within the wedding business. As the seating charts and floral arrangements fade into memory, these intimate photo shoots take place in newlyweds’ bedrooms or even the hotels where they’ve spent their first night as husband and wife. “We do it very sexy and implied,” said New Jersey-based photographer Michelle Jonné, 34, who charges about $650 for the service...Past happy clients include Inna Shamis. “The minute she told me, I thought ‘that is brilliant,’” Shamis said. “When you get married, you’re in the best shape of your life and why not have these memories.” The New Jersey PR exec, 38, only hesitated for a few seconds when Jonné asked her and husband to jump in the shower, she said. “As the day progressed, we established this fantastic chemistry with her," said Shamis, who later posted the racy photos on Facebook and intends to someday share them with her kids. Greek Crisis Evasion To Fore As Merkel Hosts Hollande (Bloomberg) With the leaders of Europe’s two biggest economies still at the confidence-building stage, Merkel and Hollande are seeking common ground on Greece and the wider euro-area debt crisis almost three years after its inception. France sees the program targets set for Greece as too harsh given the state of its economy, a French government official said yesterday on condition of anonymity because the talks are private. Merkel and Hollande are due to give statements at 7 p.m. in Berlin. “On balance we still take the view that they’ll keep Greece ticking over,” David Owen, chief European financial economist at Jefferies International Ltd. in London, said by phone. “If that does require giving it more time, so be it.” Whale Of A Tale (NYP) Boaz Weinstein may have harpooned the London Whale, but his main fund barely has its head above water. Weinstein’s Saba Capital Master Fund is up only 0.62 percent for the year through July 31, according to an investor letter. SEC's Schapiro Cancels Vote on Money-Fund Curbs (WSJ) Securities and Exchange Commission Chairman Mary Schapiro called off a highly anticipated vote on rules for the money-market mutual-fund industry after losing a swing vote she needed to push through the rules. The newly announced position of Luis Aguilar, a Democrat and former mutual-fund executive, marks a defeat for Ms. Schapiro and a setback for the Obama administration and top federal regulators, who see money funds as a source of systemic risk left over from the last financial crisis. LL Cool J breaks burglar's jaw in 'knock-down, drag-out' fight (LA Times) The burglar who broke into the Studio City home of actor-rapper LL Cool J suffered a broken nose and jaw in what police sources described as a "knock-down, drag-out" fight. Los Angeles police were called to the star's home in the 12000 block of Blairwood Drive around 1 a.m. Wednesday, officials said. LL Cool J was holding the suspect when officers arrived, officials said...LL Cool J was upstairs in his home when he heard noise coming from the kitchen area. When he went down to see what was happening, the unidentified suspect came at him, leading to the fight. LL Cool J, born James Todd Smith, rose to fame with musical hits such as "Mama Said Knock You Out."

Opening Bell: 05.15.12

In Facebook IPO, Frenzy, Skepticism (WSJ) Michael Belanger, a lawyer from Oklahoma City, invests his personal money in the stock market. But he will be skipping Facebook's IPO because he thinks its valuation is totally "out of whack." Scott Schermerhorn, chief investment officer of investment-management firm Granite Investment Advisors, says the hype around Facebook's IPO is going to keep his firm away. "It's a cult stock," he says. Little of that skepticism is weighing on three investors, tracked by The Wall Street Journal since Facebook announced in February that it would go public. Jim Supple was driving with his daughter Jade last autumn, when she turned to him and said, "Daddy, can I buy some of the Facebook company?" Mr. Supple, 47, had been teaching Jade about investing in the stock market for years. He started putting money for her in stocks like eBay and Disney when she was a baby. But the request still took him aback. "How do you know about buying Facebook?" he asked. "I saw in the news that they were going to be selling parts of the company," she responded. "Can we buy some?" Since then, Mr. Supple has been trying to find a way to take $25,000 he has saved for her college fund and purchase Facebook stock. "She doesn't need this money for another eight years," says Mr. Supple. "If it goes the Google route, I'll be in good shape." JPMorgan Said To Weigh Bonus Clawbacks After Loss (Bloomberg) The lender can cancel stock awards or demand they be repaid if an employee “engages in conduct that causes material financial or reputational harm,” JPMorgan said in its annual proxy statement. The company will claw back pay if it’s appropriate, said one of the executives, who asked not to be identified because no decisions have been made. The incident, which led to Drew’s retirement yesterday, may test JPMorgan’s claw-back policy amid mounting investor criticism over Wall Street pay practices and as regulators investigate the trades. JPMorgan Moves To Protect Dimon (WSJ) The board backs Mr. Dimon and the way he quickly admitted and sought to fix the bank's mistakes, according to this person. "We made errors, and we are going to take care of it," Mr. Dimon told fellow directors during a conference call last week, the person said. "This was bad thinking. This was stupid." Euro Chiefs May Offer Leniency to Greece (Bloomberg) Calling talk of a Greek pullout from the euro “nonsense” and “propaganda,” Luxembourg Prime Minister Jean-Claude Juncker said only a “fully functioning” Greek government would be entitled to tinker with the conditions attached to 240 billion euros ($308 billion) of rescue aid. Man Spends $60,000 In Custody Battle Over Dog Knuckles (CBS) Dershowitz, 34, said he considers Knuckles to be his son, and that although he’s gone through his life savings, he said it’s worth it. In papers filed earlier this year in Manhattan state Supreme Court, Dershowitz said ex-girlfriend Sarah Brega “kidnapped” Knuckles after they broke up. Brega said Dershowitz gave her the puggle pup — half pug, half beagle. Dershowitz started the website Rescue Knux to raise money for the custody fight. For $250, contributors can play fetch with Knuckles. For $10,000, Legends of Graffiti will do a giant, personalized mural. Dershowitz made an emotional video plea and posted the following on his site: I know it might sound funny and I understand that. If it wasn’t so painful, I would be laughing too (I mean, c’mon – dognapp – really?) but this is very serious to me and I miss him a lot. Enough that I have gone into debt to retrieve him and enough that I am on here asking for your help. I need the money to keep fighting the court battle. She comes from a wealthy family that is backing her. I don’t. She keeps filing crazy, frivolous motions just knowing that I can’t afford to respond even after the judge has ruled in my favor. The courts gave me custody already but, sadly, the system is too complex and expensive to make anything that simple and easy. I need help bringing my boy home…where he belongs…for good.” Dick Bove: No Reason to Break Up Big Banks (CNBC) JPMorgan’s much ballyhooed $2 billion loss is no reason to ramp up regulations, noted bank analyst Dick Bove said Monday. “I don’t think there’s any reason to break up the big banks,” he told CNBC. “Particularly if a bank can earn $18 billion a year and $22 billion the next year, why in heaven’s name would you say it can’t be run?” Sanders Sees Conflict With Dimon on New York Fed Board (Bloomberg) Senator Bernard Sanders said he sees a conflict with JPMorgan Chase Chief Executive Officer Jamie Dimon serving on the board of directors at the Federal Reserve Bank of New York, JPMorgan’s regulator. “It is an obvious conflict of interest,” Sanders, an Independent from Vermont, said today in an e-mail response to a question from Bloomberg News. “This is a clear example of the fox guarding the henhouse.” Chesapeake Loan Jars Bond Investors (WSJ) "This loan was priced very attractively" for lenders, said Sabur Moini, manager of a $2.5 billion high-yield-bond portfolio at Payden & Rygel, adding that turmoil in Chesapeake's bonds was largely "self-inflicted." Investor confidence was shaken by the loan, he said, but it has also been dented by other factors, including controversy over CEO Aubrey McClendon's pledging his stakes in company wells as collateral to secure loans with companies that do business with Chesapeake. Rajat Gupta Opposes U.S. Request to Limit Defense at Trial (Bloomberg) Prosecutors had sought to bar Gupta from speculating before the jury about the government’s motives in bringing the case. They also said evidence of Gupta’s past charitable contributions and the purported damage the case has had on his reputation aren’t relevant. “The government attempts to hamstring the defense,” Gupta’s lawyers said in a court filing today. “Mr. Gupta’s charitable activities are a large component of his background and a critical element of who he is as a person.” Cops bust man smuggling cocaine at JFK (NYP) A drug smuggler packed his stash of cocaine inside sticks of deodorant, ink markers and hundreds of buttons — only to be busted by alert customs officers at JFK Airport who noticed a strong odor coming from his suitcase, authorities said today...The items with cocaine hidden inside included 16 markers, 17 sticks of Dove and Odorex deodorant, 24 bottles of nail polish, and about 684 buttons.

Opening Bell: 02.01.13

Barclays CEO Gives Up Bonus For 2012 (WSJ) Mr. Jenkins, who was named Barclays CEO last year, said in a statement that it was "only right" he give up his pay in light of the various problems that have beset the U.K. bank in recent months. Mr. Jenkins's predecessor, Robert Diamond, quit the bank following allegations that the bank tried to rig interbank lending rates. Barclays is wrestling with other industrywide issues, including the misselling of payment-protection insurance and interest-rate hedging products. "I have concluded that it would be wrong for me to receive a bonus for 2012 given those circumstances," Mr. Jenkins said. Worst Not Over for Spain Banks After Big Writedowns (CNBC) "The problems for Spanish banking are far from over," Ashok Shah, chief investment officer at wealth management firm London & Capital, told CNBC on Friday. "The underlying real estate market is only half-corrected,so when it fully corrects over the next year of two, the non-performing loans are going to keep spiking up which will keep eating into the tier-one capital so the need to raise more equity is going to be enormous and very, very pressing indeed." 'London Whale' Sounded an Alarm on Risky Bets (WSJ) In one instance, Mr. Iksil told another trader that the size of his bets was getting "scary," according to emails in a Jan. 16 report by J.P. Morgan and to the people familiar with the emails. Mr. Iksil's emails, according to people familiar with them, show there was concern within J.P. Morgan's chief investment office before Chief Executive James Dimon dismissed as a "tempest in a teapot" reports on the whale trades, including an April 6 article in The Wall Street Journal. The New York company first disclosed the trading losses in May, and Mr. Dimon subsequently said he was wrong to have played down concerns raised by the news report. $3.8 Million Bonus For Gorman (NYP) Morgan Stanley reduced pay by 7.1 percent for Chairman and CEO James Gorman, giving him a $9.75 million package that included a $3.75 million long-term incentive award. The bank almost doubled Gorman’s base salary to $1.5 million from $800,000, according to a regulatory filing yesterday. Edward Koch, Brash New York Mayor in 1980s Boom, Dies at 88 (Bloomberg) Serving from 1978 through 1989, Koch presided over the Wall Street-fueled economic boom of the 1980s, turning a $1 billion budget deficit into a $500 million surplus in five years. He restored the city’s credit, doubled the annual budget to $26 billion and oversaw $19 billion in capital improvements. His subsidized housing plan produced more than 156,000 new and renovated units. “Through his tough, determined leadership and responsible fiscal stewardship, Ed helped lift the city out of its darkest days and set it on course for an incredible comeback,” Mayor Michael Bloomberg said today in a statement. He called Koch “an irrepressible icon, our most charismatic cheerleader and champion.” Koch’s in-your-face style, straight talk and catchphrase “How’m I doing?” endeared him to New Yorkers wracked by the lingering fiscal crisis, the Son of Sam serial killings and the arson and looting that erupted after a blackout in July 1977. Geraldo Rivera considering run for U.S. Senate (NYDN) "Fasten your seatbelt," the mustachioed Fox News host said on his radio show Thursday. "I've been in touch with some people in the Republican Party in New Jersey. I am truly contemplating running." The Brooklyn native is eyeing a 2014 bid for the seat currently held by aging Democrat Sen. Frank Lautenberg, who may not seek reelection. Newark’s Democrat mayor, Cory Booker, is exploring a run. Stifel Stalks Faltering Firms as Wall Street Retrenches (Bloomberg) Stifel Financial Chief Executive Officer Ron Kruszewski paused in mid-sentence and asked an employee for the list, a chart showing in red which of the St. Louis-based firm’s rivals have closed or sold out. “There’s this huge consolidation,” Kruszewski, 54, said in an interview in his office, referring to the once crowded field of U.S. regional and local brokerages that vied to serve mid-size companies. “What’s left is very few firms that ever were in the middle market. We’re one of them.” About a dozen golf putters lean against a table. Nine floors down, the lobby is being remodeled with glass and white stone, while a bronze bull and bear statue is planned for outside. The way Kruszewski views it, St. Louis is now the No. 2 U.S. brokerage hub after New York... Economy Adds 157,000 Jobs (WSJ) Economists surveyed by Dow Jones Newswires expected nonfarm payrolls to rise by 166,000 and that the unemployment rate would hold steady at 7.8%. U.S. Sues to Block Big Beer Merger (WSJ) The surprise lawsuit seeks to block Bud Light maker Anheuser-Busch InBev NV's deal with the Mexican company that owns the Corona brand, and comes just a day after concession talks with the government broke down. U.S. authorities said they want to prevent any overcharging by the global giants that dominate mass-market brews. Burger King admits it has been selling beef burgers and Whoppers containing horsemeat (DM) The fast food chain, which has more than 500 UKoutlets, had earlier given a series of ‘absolute assurances’ that its products were not involved. However, new tests have revealed these guarantees were incorrect in a revelation that threatens to destroy the trust of customers. The contamination has been going on since at least last May and potentially for up to one year, according to evidence presented earlier this week. Tonight Burger King abandoned its earlier denials, saying: ‘Four samples recently taken from the Silvercrest plant have shown the presence of very small trace levels of equine DNA. Burger King vice president, Diego Beamonte, said: ‘We are deeply troubled by the findings of our investigation and apologise to our guests, who trust us to source only the highest quality 100per cent beef burgers. Our supplier has failed us and in turn we have failed you. We are committed to ensuring that this does not happen again.' He added: ‘We will dedicate ourselves to determining what lessons can be learned and what additional measures, including DNA testing and enhanced traceability controls, can be taken to ensure that we continue to provide you with the quality products you expect from us.'

Opening Bell: 10.01.12

British Banks Face Heat From On High (WSJ) The Right Reverend Justin Welby, Bishop of Durham, is grilling top bankers as part of a new parliamentary inquiry into "banking standards" that represents the U.K. government's latest attempt to shake up the industry. The inquiry was established in July on the heels of news that several banks allegedly sought to rig interest rates such as the London interbank lending rate, known as Libor. Bishop Welby, a former oil executive who sits in Britain's House of Lords, has joined nine other lawmakers in assembling a report that will consider new rules on everything from corporate governance to conflicts of interest. The inquiry also involves a series of public hearings already under way. Sitting in a castle in his diocese in northern England, Bishop Welby said the inquiry isn't about digging into the details of banks' alleged failings in the Libor scandal and other matters. Rather, it is an attempt to determine more broadly the future role of the industry. "It's an existential question," he said. "It's about why the bankingindustry is here." Spain To Borrow $267 Billion Of Debt Amid Rescue Pressure (Bloomberg) Spain’s debt will widen to 90.5 percent of gross domestic product in 2013 as the state absorbs the cost of bailing out its banks, the power system and euro-region partners Greece, Ireland and Portugal. This year’s budget deficit will be 7.4 percent of economic output, Budget Minister Cristobal Montoro said at a press conference. Spain’s 6.3 percent target will be met because it can exclude the cost of the bank rescue, he said. Euro Leaders Face October of Unrest After ECB’s September Rally (Bloomberg) With the first of three summit meetings that European Union President Herman Van Rompuy has called “crucial” taking place in Brussels on Oct. 18-19, investor sentiment toward the euro area that surged in September is on the wane. “People are beginning to look at this in a more sober way” after the ECB bond-buying plan and a German high-court decision releasing bailout financing spurred optimism over the past month, Clemens Fuest, an economist at Oxford University’s Said Business School, said in an interview yesterday. October, which marks the third anniversary of the debt crisis, will showcase euro-area leaders fighting out their differences. The discord underscores the inadequacy so far of ECB President Mario Draghi’s bid to calm the crisis through a pledge on sovereign-debt purchases. Graduates Turn Away From Wall Street (FT) MBA statistics show a steady decline in the number of graduates taking jobs at investment banks. The Wharton school at the University of Pennsylvania, which bankers consider the “conveyor belt of Wall Street”, sent 16.6 percent of its class to investment banks in 2011 compared with more than one in four in 2008. The pattern is similar at other large business schools. “The number of students going into financial services has remained steady but what’s changed has been the types of roles,” said Maryellen Lamb, director of MBA career management at Wharton. “We’ve seen more opportunity for students in private equity and hedge fund roles.” Yield hunt pushes funds into CLOs, CDOs (Reuters) Fund managers are increasingly eyeing riskier exotic assets, some of which haven't been in fashion since the financial crisis, as yields on traditional investments get close to rock bottom. Returns from investments in "junk" bonds, government guaranteed mortgage securities and even some battered euro-zone debt are plunging in the wake of global central bank policies intended to suppress borrowing costs. In particular, the Federal Reserve's latest move to juice the U.S. economy by purchasing $40 billion of agency mortgage-backed securities every month is forcing some money managers who had previously been feasting on those securities to get more creative. The only problem is they may be getting out of their comfort zones and taking on too much risk. "I would not be surprised if some managers are reaching outside of their expertise for a few extra basis points," said Bonnie Baha, a portfolio manager for DoubleLine's Global Developed Credit strategy. Arnold Schwarzenegger 60 minutes interview video: admits habit of keeping secrets, affairs (CNN) While he did not specify how many affairs he'd had before Shriver filed for divorce in July 2011, Schwarzenegger admits two women he was involved with include "Red Sonja" co-star Brigitte Nielsen (while he and Shriver were dating, according to Schwarzenegger) and his family's longtime housekeeper, Mildred Patricia Baena. Nine months after Schwarzenegger and Baena had their affair, she gave birth to a son -- less than a week after he and Shriver's fourth child, Christopher, was born. Baena remained the family's housekeeper for years, with her son sometimes around the house as well. But Schwarzenegger said in the "60 Minutes" interview that he didn't have any suspicions he was the father until the boy was 7 or 8 years old and he began to notice "that he started looking like me." "It was never discussed, but I put things together," said Schwarzenegger, whose autobiography "Total Recall" hits bookshelves Monday. After that realization, he said he began sending Baena extra money for her and her son, without talking about his being the boy's father. Schwarzenegger also denied to Shriver that he'd had an affair and that Baena's child was his son -- until Shriver confronted him during a marriage counseling session a few months before their break-up. "She said, 'Am I off on this or am I not?' And I said, 'You are absolutely correct.'" More Wall Street Layoffs Coming (NYP) Nomura analyst Glenn Schorr said in a recent report warns that many banks, which are still overstaffed, need a more liberal wielding of the ax to squeeze out more profits in the coming years, amid a global market that continues to look sluggish. “While overcapacity is weighing on returns under the current environment, most bank managements have been in the camp that the industry is currently experiencing a cyclical rather than secular downturn,” Schorr writes. “So they’ve been slow to do too much on the head-count front,” the bank analyst said regarding layoffs. According to Schorr’s research, big banks like JPMorgan, Credit Suisse, UBS and Barclays have actually added jobs over the past three years. Goldman Sachs and Morgan Stanley have only slashed about 1 and 2 percent of their work forces, respectively. Orange Juice Gets Squeezed (WSJ) Since the start of the current hurricane season, futures prices have climbed as high as $1.4095 a pound. Traders and analysts said the possibility of storm damage fueled much of the rise. But since no such storm has materialized, investors are taking profits or cutting their losses, they added. Vikram's Housing Woes (NYP) Pandit is on track to lose money on the sale of his Greenwich, Conn. home, which he bought in June 2001 for $4.1 million. Pandit, 55, put the two-story Colonial on the market for $4.3 million in April. Now he has lowered the price to $3.9 million, according to Trulia.com. South Florida Man Inherits 13,000 Clown Items (SS) Richard Levine is now trying to wrap his head around the unusual pickle he inherited when his father-in-law and business partner died two years ago and left him essentially a warehouse full of curated items of buffoonery. There are clown dolls with faces of joy and sorrow. Clown paintings, some more colorful than others. Clown figurines and clown puppets, some tiny, some huge, some very disturbing. There are clown photographs, clown books and clown costumes...Levine, who runs the same Waterboy Sprinklers business his father-in-law started in the 1970s, said he barely has had the time to go through all of the items. He hopes to inventory all of it, sell most of it, keep some of it and donate the rest to a local charity group. "I am slowly starting to like them and getting enthusiastic about them. I can see how Jack was into them," Levine said. "I don't go for the sad clowns much though, but I really enjoy the happy ones."

Opening Bell: 03.06.12

Goldman Secret Greece Loan Reveals Sinners (Bloomberg) On the day the 2001 deal was struck, the government owed the bank about 600 million euros ($793 million) more than the 2.8 billion euros it borrowed, said Spyros Papanicolaou, who took over the country’s debt-management agency in 2005. By then, the price of the transaction, a derivative that disguised the loan and that Goldman Sachs persuaded Greece not to test with competitors, had almost doubled to 5.1 billion euros, he said. Papanicolaou and his predecessor, Christoforos Sardelis, revealing details for the first time of a contract that helped Greece mask its growing sovereign debt to meet European Union requirements, said the country didn’t understand what it was buying and was ill-equipped to judge the risks or costs...“Like the municipalities, Greece is just another example of a poorly governed client that got taken apart,” Satyajit Das, a risk consultant and author of “Extreme Money: Masters of the Universe and the Cult of Risk,” said in a phone interview. “These trades are structured not to be unwound, and Goldman is ruthless about ensuring that its interests aren’t compromised -- it’s part of the DNA of that organization. Greece Pushes For Aid Tranche (WSJ) Greece's international creditors are considering whether to grant the country a small, tranche of the €130 billion ($171.8 billion) bailout agreed earlier this month in the weeks ahead as part of efforts to pump liquidity into the country's moribund economy. Speaking to the privately owned Mega television channel Tuesday, Deputy Finance Minister Philippos Sachinidis said the money would go to paying off some of the €6 billion in accumulated arrears that the Greek government owes private contractors. He added that the disbursement could come before Greece goes to elections that are widely expected to be held in late April. "There is a discussion that, likely before the elections, we will get a tranche that will allow us to pay some of, not the total, of the arrears," Mr. Sachinidis said. Bondholder Group Sees 1 Trillion Euro Greek Default Risk (Reuters) A disorderly Greek default would probably leave Italy and Spain needing outside help to stop contagion spreading and cause more than 1 trillion euros ($1.3 trillion) of damage to the euro zone, the group representing Athens' bondholders warned. Greek private creditors have until Thursday night to say whether they will take part in a bond swap that is part of a 130 billion euros bailout deal to put the country on a more stable footing and cut its debt by more than 100 billion euros. Paulson’s Advantage Plus Declines in February (Bloomberg) John Paulson lost 1.5 percent in February in one of his largest hedge funds, according to an investor update, paring this year’s gain and setting back efforts by the New York-based manager to recoup record losses in 2011. Paulson’s Advantage Plus Fund, which seeks to profit from corporate events such as takeovers and bankruptcies and uses leverage to amplify returns, gained 3.5 percent in the first two months of 2012, according to the update IBM’s Watson Gets Wall Street Job After ‘Jeopardy’ Win (Bloomberg) International Business Machines Corp’s Watson computer, which beat champions of the quiz show “Jeopardy!” a year ago, will soon be advising Wall Street on risks, portfolios and clients. Citigroup, the third-largest U.S. lender, is Watson’s first financial services client, IBM said yesterday. It will help analyze customer needs and process financial, economic and client data to advance and personalize digital banking. Ann Romney: ‘I Don’t Even Consider Myself Wealthy’ (ABC) Mitt Romney may have more money than any other presidential candidate in the race, but his wife said today that she does not consider herself wealthy. “We can be poor in spirit, and I don’t even consider myself wealthy, which is an interesting thing,” Ann Romney said in an interview on Fox News. “It can be here today and gone tomorrow.” Swiss Pass Proposal to Help Nab US Tax Evaders (Reuters) Specifically, the plan would allow Switzerland to hand over data on suspected tax evaders, even if U.S. tax authorities cannot identify alleged offenders by name or bank account. The big-spending businessman who ran up £203,948 bar bill was 23-year-old City whizkid (Mirror) The businessman who blew £203,948 on bubbly in a single night in Liverpool was 23-year-old Alex Hope...His biography reads: “Despite his tender years, Alex is a name to watch out for in the city. An expert in the UK economy, he works the currency markets, regularly trading millions.” Describing his rapid career rise from humble beginnings to working for trading company Zone Invest Group, it adds: “A talented, charismatic and thoroughly likeable man, Alex Hope exudes knowledge and you can’t help but respect and admire this self-taught and self-made young trader.” Banker Bonus Limits Sought by EU Lawmakers (Bloomberg) Members of the European Parliament’s Socialist and Green parties have proposed that a draft EU law to bolster bank capital should include new pay rules, as well as stricter curbs on risk taking, according to two members of the institution’s financial affairs committee. “Wrong incentives were part of the banking culture that caused the crisis,” said Udo Bullmann, a German lawmaker following the proposed law for the parliament’s Socialist group. “I expect there will be quite a lot of sympathy among different party groups” for further rules on pay. Judge throws heat at Picard’s claim vs. Mets (NYP) Picard’s best evidence may be from Noreen Harrington, a former chief investment officer for a hedge fund partially owned by the Mets’ owners, who is expected to say that she told Katz and another Sterling Equities executive that she thought Madoff’s reported returns were “fiction” and not “worth the paper they’re written on.” The Mets will argue they were bamboozled by Madoff, along with the nation’s top regulators and major banks. Bill Clinton Said to Agree to Join Obama at Campaign Fundraisers (Bloomberg) While Obama raised $5 million on his last fundraising trip to New York, including $2 million from a March 1 event with members of the financial services industry, he is collecting less money from Wall Street this year compared with four years ago, according to the Center for Responsive Politics. When Gaming Is Good For You (WSJ) People who played action-based video and computer games made decisions 25% faster than others without sacrificing accuracy, according to a study. Indeed, the most adept gamers can make choices and act on them up to six times a second—four times faster than most people, other researchers found. Moreover, practiced game players can pay attention to more than six things at once without getting confused, compared with the four that someone can normally keep in mind, said University of Rochester researchers. The studies were conducted independently of the companies that sell video and computer games.