Opening Bell: 5.11.20

No negative rates; no joy for private equity in retail; no PPP money for restaurants that don’t exist; no privacy at work anymore; no ice cream for you; and more!

Author:
Dealbreaker
Publish date:
May 11, 2020

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No negative rates; no joy for private equity in retail; no PPP money for restaurants that don’t exist; no privacy at work anymore; no ice cream for you; and more!

Despite Recent Bets, Fed Isn’t Likely to Consider Negative Interest Rates [WSJ]
Fed leaders see negative rates as a very last resort—and a remote one, still—worrying they would have harmful effects on financial markets and the banking industry. More broadly, there is little political support for the policy in the U.S.

America’s Smallest Stocks Are Staging a Comeback [WSJ]
The Russell 2000 index, whose constituents have an average market cap of $2 billion, has risen 12% over the past month. That has far outpaced the S&P 500 and its 6.5% gain…. Part of the resurgence appears to be driven by investors’ confidence that both the Federal Reserve and the government are willing to do whatever it takes to stabilize the U.S. economy….
“Every investor knows the second quarter will be horrible—that’s baked in already,” Mr. Pride said. “Markets today are reflecting a base case that encompasses us going back to a generally normal state at the start of next year.”

Coronavirus Unravels Private-Equity Playbook for Some Retailers [WSJ]
Twenty-seven out of the 38 retailers with the weakest credit profiles—more than 70%—were owned by private-equity firms on April 20, according to data from ratings firm Moody’s Investors Service…. “Private-equity firms’ aggressive use of debt and drawing of billions of dollars of fees and dividends from retailers has made it more difficult for those retailers to innovate in a changing industry,” Jim Baker, executive director of the activist group Private Equity Stakeholder Project, said…. As more companies fail, stores close, and employees are furloughed or laid off, the dividends and debt loads that private-equity owners took on stand to once again become a flashpoint for public criticism.

PG&E bankruptcy positions hedge funds to make big profits [S.F. Chronicle]
Many of the funds bought PG&E stock when its position on Wall Street tanked in the months before and after the company filed for Chapter 11 protection in early 2009…. But hedge fund managers are not only interested in the equity of California’s largest yet most beleaguered power provider. They are also poised to make billions of dollars in total from investments in PG&E debt and insurance claims against the company….

Crispin Odey’s flagship fund plunged in April — reversing virus turmoil gains [FN]
Odey Asset Management's Odey European fund fell 9.5% in April and is now down 3.7% in 2020, according to data from HSBC. It's a sharp drop after a 21% gain in March, and a 6.5% rise in the first quarter of 2020…. Odey European Fund's annual performance has been up once since 2015 — a 53% jump in 2018.

Feds Announce First Arrests In Country Linked To PPP Loan Fraud [Forbes]
Staveley and Butziger claimed to have dozens of employees earning wages at four different business entities when, in fact, there were no employees working for any of the businesses. They allegedly sought more than a half-million dollars in loans…. According to court documents, the fraudulent loan requests were to pay employees of businesses that were not operating before the start of the COVID-19 pandemic and had no salaried employees. One of the restaurants had previously been open, but it was closed by March 10, 2020, when the town of Berlin revoked the business’ liquor license for numerous reasons. Another restaurant used in the scheme has not been functional since it was closed in November of 2018 and is currently in disrepair with dumpsters on-site and “Stop Work” notices posted on the property.

Wall Street Bets Virus Meltdown Gives Landlords a Chance to Grow [WSJ]
Investors are flocking to America’s mega landlords, drawn by signs the companies that emerged from last decade’s foreclosure crisis owning huge pools of rental houses are weathering the economic shutdown far better than feared. Many also expect that the coronavirus pandemic will make suburban single-family homes both more desirable and more difficult to buy for even the relatively well-heeled.
Share prices of the largest home-rental companies, such as Invitation Homes Inc. and American Homes 4 Rent, have outpaced the broader stock market since they and the S&P 500 bottomed in late March. Invitation is up 55% since then and American Homes has gained 37%, compared with the S&P 500’s 31% climb.

Welcome Back to the Office. Your Every Move Will Be Watched. [WSJ]
The arrival of Covid-19 is taking surveillance to a higher level, with some employers planning to track movements and gather personal information like never before in Western democracies…. [RXR] aims to have its social-distancing app ready at the end of May. Workers’ movements are tracked through their smartphones—you get a higher score the more time in the office you are farther than 6 feet from another person. An individual would see his or her own score, and the employer would see aggregate data on how employees are complying with social distancing as a whole./After the pandemic, RXR said the technology could be used to ensure the most efficient use of space and “the overall wellness of our customers.”

Owner closes Cape Cod ice cream shop rather than serve rude customers [NBC 10 News]
Mark Lawrence owns Polar Cave Ice Cream Parlour. He said patrons were so rude to his employees on the shop's first day back on Friday, one worker walked off the job.
"Now I open the doors to a whole new world, with gloves and masks and we're running around like chickens, and people are like, where's my ice cream! I'm not a trauma center, it's ice cream," Lawrence told WFXT…. Lawrence, buoyed by an outpouring of support from the community, reopened Sunday. He said customers were following the rules.

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

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

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Bridgewater’s new BMOCs; private equity booms, hedge funds not so much; the wages of crypto; and more!

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Dorsey adrift; private equity parties; newspaper chains opts for suicide over hedge-fund murder; and more!

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GameStop, victims bounce back; SoFi buys a charter; SPAC daddies; private equity hiring (lobbyists); and more!

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U.S. authorities probe SAC for Weight Watchers (Reuters) U.S. authorities are investigating Steven A. Cohen's SAC Capital Advisors hedge fund for possible insider trading in the shares of the popular diet company Weight Watchers International Inc, according to people familiar with the matter. The investigation focuses on trading in Weight Watchers shares in the first half of 2011, when SAC Capital had taken a sizeable position in the stock, and potentially could implicate the billionaire hedge fund manager, the sources said on Friday. Regulatory filings show that Cohen's $14 billion fund briefly held 2.1 million shares in Weight Watchers during the period under scrutiny by authorities - at which time the diet company's stock price roughly doubled. The inquiry is in its early stages and it is not clear whether anything improper was done either by SAC Capital or Cohen himself, said the people familiar with the matter, who requested anonymity. The trading in Weight Watchers would be permissible as long as it was based on fundamental research or derived from individuals who did not have access to non-public corporate information. Big Money Bets On Housing Rebound (NYT) A flurry of private-equity giants and hedge funds have spent billions of dollars to buy thousands of foreclosed single-family homes. They are purchasing them on the cheap through bank auctions, multiple listing services, short sales and bulk purchases from local investors in need of cash, with plans to fix up the properties, rent them out and watch their values soar as the industry rebounds. They have raised as much as $8 billion to invest, according to Jade Rahmani, an analyst at Keefe Bruyette & Woods. The Blackstone Group, the New York private-equity firm run by Stephen A. Schwarzman, has spent more than $1 billion to buy 6,500 single-family homes so far this year. The Colony Capital Group, headed by the Los Angeles billionaire Thomas J. Barrack Jr., has bought 4,000. Wall Street workers expecting worst bonus season since 2008 (NYP) State Comptroller Thomas DiNapoli estimates that the average bonus this year will be $101,000 — a 16.5 percent decline from last year and almost a 50 percent decline since 2006, when the average was $191,360. ‘‘I don’t think this year’s bonuses are going to be very good,’’ said Dan Shaffer, CEO of Shaffer Asset Management. ‘‘I don’t believe the typical bonuses, as we used to know them, exist anymore.’’ Obama Meets with Boehner Privately at White House (Bloomberg) The meeting was the first known face-to-face conversation between the two leaders since Nov. 16, when Boehner and other congressional leaders sat down with Obama at the White House. They have talked on the telephone since then. Obama met with Nancy Pelosi, the House Democratic minority leader, on Dec. 7. Investors offer about $38.8 billion in Greek debt buyback (Reuters) Greece is set to purchase back about half of its debt owned by private investors, broadly succeeding in a bond buyback that is key to the country's international bailout, a Greek government official said on Saturday. Hefner Husband Takes Insider Trading Into Playboy Bedroom (Bloomberg) Christie Hefner, [daughter of Hugh and] former chief executive officer of Playboy Enterprises Inc., said she was shocked as her husband of 15 years, William Marovitz, confessed to her that he was being investigated for suspicious trading in Playboy shares. They were in their apartment atop a 42-story Lincoln Park tower overlooking the glittering Chicago skyline and Lake Michigan on a March evening in 2010. “He told me he had been contacted by the SEC,” Hefner said later in testimony before the U.S. Securities and Exchange Commission, which didn’t accuse her of any wrongdoing. “And when did you learn your husband owned shares of Playboy?” she was asked. “In that conversation,” she replied. Hefner's husband is just one of more than 400 persons the SEC and the U.S. Department of Justice have accused of insider trading in a crackdown in the last five years, according to data compiled by Bloomberg. All involved betrayal -- of clients, employers, relatives or friends. The Hefner episode and a handful of cases like it include an especially cruel breach of trust: betrayal of a wife by a husband. Tennis star Novak buys up world's supply of donkey cheese at £400 a pound for new restaurant chain (DM) The cheese, known as pule, will be one of the key attractions at a chain of restaurants the Wimbledon champion and world number one is opening in his Serbian homeland...The Zasavica farm, which lies 50 miles west of the Serbian capital Belgrade, boasts a herd of 130 and is said to be the only place in the world where donkeys are milked for cheese. Banking Industry Squirms Over European Rate Probe (WSJ) The scandal over banks' attempted manipulation of interest rates has mostly centered on the London interbank offered rate. But Libor's lesser known cousin, the euro interbank offered rate, or Euribor, is facing mounting attacks. The European Union is expected soon to accuse multiple banks of attempted collusion in the setting of Euribor, according to people briefed on the probe. Barclays has already acknowledged trying to rig the rate, and other banks are likely to be pressed by regulators in the U.S., U.K. and elsewhere into similar admissions, according to industry and regulatory officials. Mortgage Crisis Presents a New Reckoning to Banks (NYT) Regulators, prosecutors, investors and insurers have filed dozens of new claims against Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and others, related to more than $1 trillion worth of securities backed by residential mortgages. Estimates of potential costs from these cases vary widely, but some in the banking industry fear they could reach $300 billion if the institutions lose all of the litigation. Depending on the final price tag, the costs could lower profits and slow the economic recovery by weakening the banks’ ability to lend just as the housing market is showing signs of life. Crisis Measure Nears End (WSJ) Barring action by Congress, the FDIC on Dec. 31 will stop providing an unlimited guarantee on zero-interest bank accounts used by businesses and municipalities for payroll and other services. The guarantee would then revert to the normal $250,000 in insurance per depositor at any given bank. If the guarantee isn't extended, FBR Capital Markets estimates as much as $250 billion in deposits could flow out of smaller banks to large banks or big money-market mutual funds. Stylish primate charms Toronto shoppers (The Star) A North York Ikea store attracted an unusual customer Sunday afternoon, when a tiny monkey dressed in a fitted faux shearling coat and diapers appeared in the store’s upper parking garage around 2 p.m. “It was just running around screaming,” said shopper Bronwyn Page...“It was really cute,” said Lisa Lin, another shopper. “It was smaller than a cat.” But if the monkey had hoped to stock up on Billy bookcases or Swedish meatballs, its plans were thwarted. The diminutive shopper never made it into the store, said manager Alvaro Carmona. No one was hurt in the incident, which lasted no more than half an hour, he added. Animal Services identified the monkey as a rhesus macaque, an Asian species that is prohibited in Ontario. The monkeys are known for their ability to live in diverse habitats – although Canadian winters obviously require a warm coat. The owner of the primate turned himself in to Animal Services just after 5 p.m. He was charged with owning a prohibited animal, an offence that carries a $200 fine. The seven-month-old monkey has somehow managed to escape his owner’s car in the Ikea parking lot, said animal control officer David Behan.