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Opening Bell: 8.6.21

Opening Bell: 8.6.21

De-fraud; cryptocompromise; alleged ethical lapses have nothing to do with company’s ethics, company says; and more!

De-fraud; cryptocompromise; alleged ethical lapses have nothing to do with company’s ethics, company says; and more!

US employers added 943,000 jobs in July, signaling a strong labor market [CNN Business]
The June jobs gains was revised up as well, to 938,000 positions added, showing the recovery's strong pace over the summer.
"I have yet to find a blemish in this jobs report," wrote Harvard economist Jason Furman on Twitter.

SEC Brings and Settles First Case in Crypto-Linked DeFi Sector [WSJ]
The SEC said Friday it had charged two Florida men, Gregory Keough and Derek Acree, and their company, Blockchain Credit Partners, with making materially false and misleading statements in selling more than $30 million of unregistered securities using smart contracts, which are digital consent agreements, and DeFi technology…. One problem with the platform’s business model was that, while the real-world assets it intended to purchase would generate sufficient income to pay interest, they might not cover the appreciation of investors’ principal if prices for volatile cryptocurrencies rose, the SEC said.

Cryptocurrency Compromise Emerges for Infrastructure Bill [WSJ]
Sen. Rob Portman (R., Ohio) on Thursday said he agreed on the need to clarify the provision, which he wrote and is backed by the Biden administration. It aims to require brokers of digital assets to report on gains reaped on trading to the Internal Revenue Service…. “Our amendment makes clear that reporting does not apply to individuals developing blockchain technology and wallets,” said [Sen Ron] Wyden, who heads the Senate’s tax-writing panel…. After days of resisting changes to the amendment, Mr. Portman signaled Thursday he was inclined to support a compromise.

Allianz Defends Company Culture Amid DOJ Probe [WSJ]
Oliver Bäte said “the event does not have anything to do with the performance ability, culture or the ethics of Allianz Group….” Mr. Bäte said the DOJ investigation led Allianz to reassess the situation around the funds, and in the past week, the company has realized that “not everything went perfectly well in the fund management.” He said that analysis was separate from whether the products were good or bad investments.

Senators Go Beyond Biden to End Private-Equity Tax Break [Bloomberg]
Senate Finance Committee Chairman Ron Wyden and Rhode Island’s Sheldon Whitehouse, a member of the panel, are introducing legislation Thursday to repeal the break for carried interest, which allows private equity fund managers to pay lower tax rates on their earnings than they would for regular income. The bill would also prohibit them from deferring tax payments on those earnings, another benefit embedded into the current law…. Biden, in his American Families Plan, called for an end to carried interest, but stopped short of eliminating investors’ ability to delay paying taxes on the income….
“One of the most indefensible loopholes in the tax code allows wealthy private equity managers to be taxed at lower rates than nurses treating Covid patients and avoid paying any tax year after year after year,” Wyden said in a statement. “Private equity managers will no longer be able to defer paying tax for years, if not decades.”

Biden could start reshaping the Fed next month — and progressives will want a say [CNBC]
The Fed chair job isn’t the only role up for grabs. The term for Vice Chairman Randal Quarles, the central bank’s point person for regulation, expires in October. And this all means that Fed Governor Lael Brainard could be in line for a promotion.
Political aides who spoke to CNBC about the Fed turnover said the Biden administration is considering sending its nominations as a bundle to the Senate Banking Committee in September. They stressed that the search progress is ongoing, and that the timeline could shift based on whether Biden decides to renominate Powell.

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By Mike Cauldwell (https://www.casascius.com/photos.aspx) [Public domain], via Wikimedia Commons
Opening Bell

Opening Bell: 6.9.21

Cascade of cash; infrastructure talks buckle; NuBuffett; and more!

covidtest
Opening Bell

Opening Bell: 5.15.20

Stocks rise; retailers fall; companies lie; activist crowned; senator de-phoned; dining with blow-up dolls; and more!

Opening Bell

Opening Bell: 12.17.12

SAC E-Mails Show Steve Cohen Consulted on Key Dell Trade (Bloomberg) Two days before Dell Inc. was set to report second-quarter 2008 earnings, Jon Horvath, a technology analyst at SAC Capital Advisors LP, e-mailed his boss Michael S. Steinberg and another portfolio manager to warn that the computer maker would miss earnings estimates. “I have a 2nd hand read from someone at the company,” Horvath began the Aug. 26 message, which provided details on gross margins, expenditures and revenue. “Please keep to yourself as obviously not well known.” Steinberg, a 15-year veteran of the hedge fund founded by billionaire Steven A. Cohen, responded: “Yes normally we would never divulge data like this, so please be discreet. Thanks.” The e-mails indicate Steinberg, the longest-serving SAC employee linked to the U.S. insider-trading probe, discussed the Dell trade with Cohen. While neither has been accused of any wrongdoing, the messages were admitted as evidence at the New York insider-trading trial of two hedge-fund managers last week after a judge ruled they supported prosecutor claims that Steinberg should be considered an unindicted co-conspirator. AIG To Sell Life Insurer Stake (WSJ) AIG will sell its stake in Asian life insurer AIA Group Ltd., raising as much as $6.5 billion in what could be the second-largest deal in Asia this year. Completion of the sale will mark another step forward for AIG, which is shedding noncore assets, as it seeks to repay its debt to the U.S. government, which took over the company in a $182 billion bailout in 2008. A Shadow Over Banks As UBS Nears Libor Deal (WSJ) The Swiss bank is set to agree as soon as this week to pay roughly $1.5 billion to settle allegations of wrongdoing related to benchmarks such as the London interbank offered rate, or Libor, say people close to the talks. So far, UBS has agreed in principle with the U.S. Justice Department that a company unit in Japan will plead guilty to a criminal charge, according to a person familiar with the tentative deal. The Zurich-based parent will pay the fine in return for a deal that lets it avoid criminal prosecution. Criminal charges against individuals are expected to be filed in tandem with the settlement, according to U.S. officials briefed on the matter. The pursuit of criminal charges and the higher-than-expected fine are ominous signs for more than a dozen financial firms still under investigation. "There's no panic—yet," says someone close to one of the banks in the sprawling probe. Moody’s Gets No Respect as Bonds Shun 56% of Country Ratings (Bloomberg) The global bond market disagreed with Moody’s Investors Service and Standard & Poor’s more often than not this year when the companies told investors that governments were becoming safer or more risky. Yields on sovereign securities moved in the opposite direction from what ratings suggested in 53 percent of the 32 upgrades, downgrades and changes in credit outlook, according to data compiled by Bloomberg. That’s worse than the longer-term average of 47 percent, based on more than 300 changes since 1974. This year, investors ignored 56 percent of Moody’s rating and outlook changes and 50 percent of those by S&P. Economy Poised To Nudge Ahead In 2013 (WSJ) So that's nice. Boehner Opens the Door to Tax Hikes on the Wealthy (Reuters) U.S. House of Representatives Speaker John Boehner's offer to accept a tax rate increase for the wealthiest Americans knocks down a key Republican road block to a deal resolving the year-end "fiscal cliff." The question now boils down to what President Barack Obama offers in return. Such major questions, still unanswered so close to the end of the year suggest, however, that no spending and tax agreement is imminent. A source familiar with the Obama-Boehner talks confirmed that Boehner proposed extending low tax rates for everyone who has less than $1 million in net annual income, meaning tax rates would rise on all above that line. Actor Depardieu Hits Back at French PM Over Taxes (CNBC) Actor Gerard Depardieu, accused by French government leaders of trying to dodge taxes by buying a house over the border in Belgium, retorted that he was leaving because "success" was now being punished in his homeland. A popular and colourful figure in France, the 63-year-old Depardieu is the latest wealthy Frenchman to seek shelter outside his native country after tax increases by Socialist President Francois Hollande. Prime Minister Jean-Marc Ayrault described Depardieu's behaviour as "pathetic" and unpatriotic at a time when the French are being asked to pay higher taxes to reduce a bloated national debt. "Pathetic, you said pathetic? How pathetic is that?" Depardieu said in a letter distributed to the media. "I am leaving because you believe that success, creation, talent, anything different must be sanctioned," he said. [...] The "Cyrano de Bergerac" star recently bought a house in Nechin, a Belgian village a short walk from the border with France, where 27 percent of residents are French nationals, and put up his sumptuous Parisian home up for sale. Depardieu, who has also inquired about procedures for acquiring Belgian residency, said he was handing in his passport and social security card. Singapore Establishment Challenged by Carson Block on Olam (Bloomberg) When Carson Block likened Olam International Ltd. to fraud-ridden Enron Corp., he challenged more than the accounting of the Singapore-based commodities firm. He also took on Temasek Holdings Pte, the government-owned investment company whose money has helped build the city-state into a corporate dynamo known as Singapore Inc. Temasek is Olam’s second-largest shareholder, with a 16 percent stake that has lost more than $100 million in value since Nov. 19, when Block’s Muddy Waters LLC first questioned the validity of the company’s finances and said it was betting against the stock. Temasek is also the biggest shareholder in many of the country’s best-known companies, including DBS Group Holdings Ltd., Southeast Asia’s largest bank, Singapore Telecommunications Ltd. and Singapore Airlines Ltd. “Carson Block is putting his whole reputation on this one,” said Low Chee Keong, associate professor of corporate law at the Chinese University of Hong Kong. “He’s taking on the Singapore government, Singapore Inc. here.” UN court orders immediate release of Argentine ship seized by hedge funder Paul Singer over unpaid debt (AP) A United Nations court ordered the immediate release Saturday of an Argentine navy training ship held in Ghana two months ago at the request of an American hedge fund. The ARA Libertad was held Oct. 2 in the port of Tema as collateral for unpaid bonds dating from Argentina's economic crisis a decade ago. Argentina appealed to the UN's International Tribunal for the Law of the Sea for the ship's release, arguing that as a warship the Libertad is immune from being seized. In an expedited ruling, the court ordered that Ghana "forthwith and unconditionally release the frigate ARA Libertad" and ensure the ship and its crew can leave Ghanaian waters. It also ordered that the vessel should be resupplied as needed. Detaining the ship was "a source of conflict that may endanger friendly relations among states," the court said. The ruling leaves untouched the parties' rights to seek further international arbitration on the matter. Debt Loads Climb In Buyout Deals (WSJ) Private-equity firms are using almost as much debt to fund acquisitions as they did before the financial crisis, as return-hungry investors rush to buy bonds and loans backing those takeovers. The rise in borrowed money, or leverage, heralds the possibility of juicy returns for buyout groups. Ominously, the surge also brings back memories of the last credit binge around six years ago, which saddled dozens of companies with huge levels of debt. Berlusconi's Love Life Lost in Translation (CNBC) Global media reports that the former Italian prime minister Silvio Berlusconi announced his engagement to his 28-year-old girlfriend on one of his TV Channels on Sunday, have been dismissed by native Italians who say Berlusconi has been mis-translated. Various newspapers have reported that Berlusconi is to get married for the third time, when in fact he announced that he is in love and in a relationship...Professor of Modern Italian History at University College London (UCL), John Foot, told CNBC that Pascale is a"girlfriend, nothing more." "In Italy the phrase 'Mi sono fidanzato' usually means 'I have a girlfriend or boyfriend' and not 'I am engaged to be married'. This can cause confusion abroad but is pretty clear in the Italian context," he told CNBC. Twinkies again by spring? It could happen (NBC) It’s not even Christmas, but Twinkies fans may be able to start looking forward to an Easter present. Bankrupt Hostess Brands has received a number of bids from companies interested in buying the maker of Twinkies, Ho Hos, and Wonder bread, including retail heavyweights such as Wal-Mart Stores Inc. and Kroger Co, Bloomberg News reported Friday, quoting an unnamed person familiar with the matter...Anthony Michael Sabino, a bankruptcy attorney and a professor at St. John's University, said bankruptcy judge Robert Drain was motivated to move quickly. Bidding will likely take place by early January, since the assets — if not the treats themselves — could become stale. “I think this will move a at a fairly decent pace. He knows what’s at stake here.

Opening Bell

Opening Bell: 12.21.12

Critics Say UBS Let Off Too Easy (WSJ) Our goal here is not to destroy a major financial institution," Lanny Breuer, assistant attorney general for the Justice Department's criminal division, said Wednesday after the $1.5 billion fine against UBS was announced. Prosecutors have to at least "evaluate whether or not innocent people might lose jobs" and other types of potential collateral damage. Sen. Charles Grassley (R., Iowa), a Senate Finance Committee member, said he is unsatisfied that prosecutors didn't go higher up the corporate ladder at UBS than its Japanese subsidiary..."The reluctance of U.S. prosecutors to file criminal charges over big-time bank fraud is frustrating and hard to understand," Mr. Grassley said. The $1.5 billion fine is a "spit in the ocean compared to the money lost by borrowers at every level, including taxpayers." Regulatory 'Whale' Hunt Advances (WSJ) The first regulatory ripples from the "London Whale" trading fiasco are about to hit J.P. Morgan Chase. The Office of the Comptroller of the Currency, led by Comptroller Thomas Curry, is preparing to take a formal action demanding that J.P. Morgan remedy the lapses in risk controls that allowed a small group of London-based traders to rack up losses of more than $6 billion this year, according to people familiar with the company's discussions with regulators. Khuzami To Leave SEC Enforcement Post (WSJ) Robert Khuzami, head of the Securities and Exchange Commission's enforcement unit, plans to leave the agency as soon as next month, a person familiar with the expected move said Thursday. Boehner Drops ‘Plan B’ as Budget Effort Turns to Disarray (Bloomberg) House Speaker John Boehner scrapped a plan to allow higher tax rates on annual income above $1 million, yielding to anti-tax resistance within his own party and throwing already-stalled budget talks deeper into turmoil. He will hold a news conference today at 10 a.m. Washington time to discuss the next steps in the budget dispute, a Republican leadership aide said. House members and senators won’t vote on the end-of-year budget issues until after Christmas, giving them less than a week to reach agreement to avert tax increases and spending cuts set to take effect in January. The partisan divide hardened yesterday, making the path to a deal more uncertain. BlackRock Sees Distortions in Country Ratings Seeking S&P Change (Bloomberg) Credit rating companies are distorting capital markets by assigning the same debt ranking to countries from Italy to Thailand and Kazakhstan, according to BlackRock, the world’s biggest money manager. While 23 countries share the BBB+ to BBB- levels assessed by Standard & Poor’s, the lowest investment grades, up from 15 in 2008 at the beginning of the financial crisis, their debt to gross domestic product ratios range from 12 percent for Kazakhstan to 44 percent for Thailand and 126 percent for Italy, International Monetary Fund estimates show. The cost of insuring against a default by Italy, ranked BBB+, over the next five years is almost triple that for Thailand, which has the same rating. For BlackRock, which oversees $3.7 trillion in assets, the measures are so untrustworthy that the firm is setting up its own system to gauge the risk of investing in government bonds. This year, the market moved in the opposite direction suggested by changes to levels and outlooks 53 percent of the time, data compiled by Bloomberg show. “The rating agencies were very, very slow to the game,” Benjamin Brodsky, a managing director at BlackRock International Ltd., said in a Nov. 23 interview from London. “They all came after the fact. For us, this is not good enough.” If You Bought Greek Bonds in January You Earned 80% (Bloomberg) Greek government bonds returned 80 percent this year, compared with 3.7 percent for German bunds and 6.1 percent for Spanish securities, Bank of America Merrill Lynch indexes show. It’s the first year since 2009 that investors made money on Greek securities, with 2012 providing the biggest advance since Merrill began compiling the data in 1998, according to figures that don’t reflect this month’s debt buyback by the government. Texas lawmaker: ‘Ping-pongs’ deadlier than guns (The Ticket) Incoming Texas State Rep. Kyle Kacal says guns don’t kill people—ping-pong kills people. "I've heard of people being killed playing ping-pong—ping-pongs are more dangerous than guns," he says. "Flat-screen TVs are injuring more kids today than anything." The lifetime rancher, who will take his seat in 2013 as a freshman, says that new gun restrictions are unnecessary. Kacal, who reportedly operates a hunting business, notably came out against a bill instructing Texans how to secure their assault weapons. "People know what they need to do to be safe. We don't need to legislate that—it's common sense," he said. "Once everyone's gun is locked up, then the bad guys know everyone's gun is locked up." Flare-up in war of words between Ackman, Herbalife (NYP) “This is the highest conviction I’ve ever had about any investment I’ve ever made,” Ackman said yesterday in a series of interviews. The investor told CNBC that he expects the Federal Trade Commission will take a “hard look” at the company. The heavyweight battle picked up steam over the last two days and has become, in the typically slow days leading up to Christmas, one of the most-watched events on Wall Street. As the financial world watched, Herbalife CEO Michael Johnson returned fire — calling Ackman’s statements “bogus” and asking the Securities and Exchange Commission to probe the motives of Ackman and his Pershing Square Capital hedge fund. A spokeswoman said if Johnson were allowed the chance to face-off against the investor at the Downtown conference, the CEO “would have been able to tear Mr. Ackman’s premises and interpretation of our business model apart.” Citigroup Said to Give CCA Managers 75% Stake in Funds for Free (Bloomberg) Among Vikram Pandit’s last jobs as Citigroup’s chief executive officer was to decide the fate of the bank’s hedge-fund unit, which employs some of his oldest colleagues. He agreed to give them most of it for free. While Citigroup is keeping a 25 percent stake, managers at the Citi Capital Advisors unit will pay nothing for the remaining 75 percent of that business as it becomes a new firm managing as much as $2.5 billion of the bank’s money, according to people with knowledge of the plan. The lender will pay the executives fees while gradually pulling out assets to comply with impending U.S. rules, said the people, who requested anonymity because the terms aren’t public. The deal was Citigroup’s response to the Volcker rule. Peter Madoff Is Sentenced to 10 Years for His Role in Fraud (Dealbook) A lawyer by training, Peter Madoff is the second figure in the scandal to be sentenced. His older brother, Bernard, pleaded guilty in March 2009 and is serving a prison term of 150 years. UK Boom in Pound Shops: An Austerity-Proof Business Model? (CNBC) Pound shops in the U.K. are reporting massive increases in profits across the board showing that the formula "pile 'em high and sell 'em cheap" has particular resonance in Britain's current age of austerity. Names like "Poundstretcher," "Poundland" and "99p Stores" in the U.K. have become high street stalwarts as other brands go bust. The chains, immediately recognizable on price point, are opening new stores and reporting record results reflecting the increasing public demand for cheaper goods. U.K. based "Poundland" is one such chain reporting steep sales growth as its range of 3,000 items -- from umbrellas and pregnancy tests (it sells 14,000 a week) to bird feeders and bags of crisps all priced at one pound – resonates with cash-strapped Britons. In the year to April 2012, the Warburg Pincus owned company said its turnover increased 22 percent to 780 million pounds ($1.25 billion) and profits increased by 50 percent to 18.3 million pounds from last year's figure of 12.2 million. Former Olympian Suzy Favor Hamilton admits to life as a $600-an-hour hooker (NYP) Steamy, lingerie-clad images of the champion runner helped tout her services on the Web site of a Vegas escort agency called Haley Heston’s Private Collection, where Favor Hamilton operated under the name “Kelly Lundy,” according to The Smoking Gun. Customers could hire her lithe Olympic-class runner’s body for $600 an hour, $1,000 for two hours and $6,000 for 24 hours. The site described her build as “athletic,” her bosom as “perky,” and her belly button as “pierced.” She was willing to provide horny customers the full “girlfriend experience,” and would also engage in a certain undisclosed sex act for an extra $300. “I enjoy men of all shapes, sizes and colors, and I have an affinity for women (I am bisexual),” “Kelly” wrote on her page on the escort service’s Web site. “I consider dates with couples an experience to cherish.” Her sexual skills reportedly earned her a high rating on The Erotic Review, a Web site frequented by prostitution fans. Favor Hamilton’s lusty secret life might have stayed secret if she had not made the mistake of revealing her true identity to some of her wealthy johns, who went to the media.

By Mike Cauldwell (https://www.casascius.com/photos.aspx) [Public domain], via Wikimedia Commons
Opening Bell

Opening Bell: 4.14.21

Coinbase and ConsenSys; Credit Suisse still selling; TP tamp down; and more!

Opening Bell

Opening Bell: 01.03.13

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

Opening Bell

Opening Bell: 08.01.12

Hope For MF Global Clients (WSJ) A bankruptcy trustee sifting through the remains of MF Global Holdings Ltd. expressed confidence that the failed securities firm's U.S. customers will get all their money back. In written testimony submitted to the Senate Agriculture Committee for a hearing Wednesday, trustee Louis J. Freeh said farmers, ranchers, traders and other investors still owed an estimated $1.6 billion "eventually will be made whole," according to a copy of the testimony reviewed by The Wall Street Journal. UBS Facing Battle On Facebook After Nasdaq Set Aside Cash (Bloomberg) Nasdaq OMX’s creation of a $62 million pool to pay brokers that lost money in Facebook’s public debut shows how far apart the exchange owner is from UBS on who is to blame for losses in the botched deal. Switzerland’s biggest bank said yesterday that its second- quarter profit fell 58 percent in part because of losses that exceeded $350 million in the May 18 initial public offering. UBS is among brokers including Knight Capital Group that have said they’ll seek compensation after a design flaw in Nasdaq’s computers delayed orders and confirmations just as the shares were about to start changing hands. UBS promised legal action to get back more than five times as much money as Nasdaq has set aside. Greeks Can No Longer Afford Paying Expensive Bribes (Reuters) Greeks, whose country is facing bankruptcy, can no longer afford the expensive customary cash-filled "fakelaki" or "little envelope" bribes paid to public sector workers, according to an official. Greece, dependent on international aid to remain solvent, has struggled for years with rampant corruption that has hampered efforts to raise taxes and reform its stricken economy. The health sector and the tax authorities topped the country's corruption rankings for 2011, said a report by Leandros Rakintzis, tasked with uncovering wrongdoing in the public sector...As the crisis deepens, more and more Greeks find themselves no longer able to pay expensive bribes, Rakintzis said. "There are no longer serious corruption offences. There is no money for major wrongdoings," he was quoted as saying by Proto Thema newspaper. Oakland Leaders Enter Battle With Goldman Sachs (Reuters) Oakland is trying to get out of a Goldman-brokered interest rate swap that is costing the cash-starved city some $4 million a year. The swap, entered into 15 years ago as part of a bond sale to hedge against rising interest rates, has turned sour for Oakland now that interest rates are near zero. "I hope that other cities will follow our lead," said Oakland city council member Desley Brooks, addressing about 30 protesters outside Goldman's San Francisco offices. Société Générale Profit Hit by Write-Downs (WSJ) Revenue fell 3.6% to €6.27 billion from €6.50 billion a year earlier. Weak capital markets weighed on corporate and investment bank revenue, which dropped 33% to €1.22 billion in the quarter. French retail bank operations were flat at €2.04 billion while international retail bank revenue fell 1.7% to €1.24 billion. ADP: Private Hiring Jumps (WSJ) Private-sector jobs in the U.S. increased 163,000 last month, according to a national employment report calculated by payroll processor Automatic Data Processing Inc. and consultancy Macroeconomic Advisers. The gain was far above economists' median expectation of 108,000 contained in a survey done by Dow Jones Newswires. The June data were revised to show an advance of 172,000 instead of the 176,000 increase reported earlier. Olympics badminton: Eight players disqualified (BBC) The Badminton World Federation has disqualified eight players after accusing them of "not using one's best efforts to win." Four pairs of players - two from South Korea and one each from China and Indonesia - are out of the Olympics after their matches on Tuesday. The eight were charged after a stream of basic errors during the match. All four pairs were accused of wanting to lose in an attempt to manipulate the draw for the knockout stage. The federation met on Wednesday morning to discuss the case. As well as the "not using best efforts" charge, the players were also accused of "conducting oneself in a manner that is clearly abusive or detrimental to the sport." Speaking before the verdict, Korea's coach Sung Han-kook said: "The Chinese started this. They did it first." Regulate, Don't Split Up, Huge Banks (NYT) Steven Rattner: "We need a Dodd-Frank do-over to create the right oversight apparatus for huge banks. Regulators will always be outnumbered by bankers, and they will never find every problem. But, like prison guards, regulators are essential, even if they are outnumbered. In a world of behemoth banks, it is wrong to think we can shrink ours to a size that eliminates the “too big to fail” problem without emasculating one of our most successful industries." Poker Site Pays $731 Million Fine (WSJ) PokerStars agreed to pay $731 million to end a Justice Department lawsuit alleging bank fraud, money laundering and violations of gambling regulations against it and a another poker website. Under the terms, PokerStars, based in the Isle of Man, will pay $547 million to the Justice Department and $184 million to poker players overseas owed money by it and rival website, Full Tilt Poker. As part of the arrangement, Pokerstars will acquire the assets of Full Tilt, once a fierce rival. Stocks Perform Better If Women Are On Company Boards (Bloomberg) Shares of companies with a market capitalization of more than $10 billion and with women board members outperformed comparable businesses with all-male boards by 26 percent worldwide over a period of six years, according to a report by the Credit Suisse Research Institute, created in 2008 to analyze trends expected to affect global markets. “Companies with women on boards really outperformed when the downturn came through in 2008,” Mary Curtis, director of thematic equity research at Credit Suisse in Johannesburg and an author of the report, said in a telephone interview. “Stocks of companies with women on boards tend to be a little more risk averse and have on average a little less debt, which seems to be one of the key reasons why they’ve outperformed so strongly in this particular period.” ‘High’-end LI coke shuttle (NYP) A Bronx-based drug crew used secret car compartments activated by air conditioning and wiper buttons to deliver up to four kilograms of cocaine to the East End of Long Island each week, Suffolk County authorities said yesterday. Two Bronx men and a Riverhead distributor were busted after a seven-month investigation into the coke operation that flooded the Hamptons with $60 one-gram bags of the white powder. Suffolk DA Thomas Spota said the crew transported the product in cars with secret stash areas that opened when basic car-function buttons were pressed in sequence.

Opening Bell

Opening Bell: 02.22.13

AIG Swings to Loss on Sandy Costs, Sale of Unit (WSJ) AIG posted a loss of $3.96 billion, or $2.68 a share, compared with profit of $21.5 billion, or $11.31, a year earlier. Its life-insurance and retirement-services business earned $1.09 billion, up 20% from a year earlier. The company also said it would take a loss of about $4.4 billion on the planned sale of a 90% stake in the plane unit, International Lease Finance Corp. AIG's full-year net income of $3.4 billion marked a sharp decline from the $20.6 billion profit the company posted for 2011, when it adjusted its balance sheet to reflect its expected use of more than $18 billion in tax benefits. CFTC Sues CME Group, Alleging Trade-Data Leaks (WSJ) U.S. regulators took aim at the world's largest futures-exchange operator, accusing CME Group Inc. and two former employees of allegedly sharing details on clients' trades with a commodities broker. The civil charges, leveled Thursday by the Commodity Futures Trading Commission, mark the first time the agency has sued CME in federal court. The case also highlights how regulators have responded to flagging confidence in the financial markets by scrutinizing more closely some of Wall Street's central pillars: the exchanges. The CFTC charged a unit of Chicago-based CME and two former employees with disclosing private information about trading in its big energy markets to an outside party between 2008 and 2010 in return for meals and entertainment. CME said Thursday it would contest the charges. "Markets are too important for this [type of allegation] to be taken lightly," Bart Chilton, a CFTC commissioner, said in an interview. Citigroup bows to shareholder pressure, overhauls pay (Reuters) Citigroup said on Thursday it has overhauled an executive pay plan that shareholders rejected last year as overly generous, revising it to tie bonus payments more closely to stock performance and profitability. The company also said it will pay new Chief Executive Mike Corbat $11.5 million for his work in 2012, in line with remuneration for his peers at other major banks. The new plan was crafted after board Chairman Michael O'Neill and other directors met with "nearly 20" shareholders representing more than 30 percent of Citigroup stock, Citi said in a filing. Watchdog Says LinkedIn paid no federal income tax over past three years (NYP) The Mountain View, Calif., social network for professionals escaped the tax man because of a rule that allows companies to deduct expenses from employee stock awards, the watchdog, the Center for Tax Justice, told The Post. It’s a longstanding accounting trick that has spared many tech firms — including Amazon and Yahoo from 2009 to 2011 — from sharing any of their profits with the IRS, the CTJ said. “On $160 million profits over the last three years, LinkedIn paid zero federal income taxes,” said the CTJ’s Rebecca Wilkins. “The stock option deduction was big enough to wipe out all their taxes.” Unemployment applications up 20,000 last week to 362,000 (AP) The Labor Department said Thursday that thefour-week average, a less volatile measure, rose 8,000 to 360,750, the highest in six weeks. Trump Twitter Mystery! Who Hacked the Donald? (CNBC) In what appears to be the latest in a minor wave of attacks on Twitter accounts belonging to out-sized corporate entities, an out-of-character tweet from Donald Trump's verified account set the Internet abuzz, and then disappeared, shortly before noon ET on Thursday. "These hoes think they classy, well that's the class I'm skippen," read the suspect remark issued from @realDonaldTrump. It was a glaring non sequitur following tweets such as "Republicans must be careful with immigration—don't give our country away," and "Wow, Macy's numbers just in-Trump is doing better than ever — thanks for your great support!" "Yes, obviously the account has been hacked and we are looking for the perpetrator," Rhona Graff, senior vice president, assistant to the president of the Trump Organization, told NBC News via email. This confirmation was quickly echoed by Trump himself, in a tweet that read, "My Twitter has been seriously hacked — and we are looking for the perpetrators." UBS to Trade Equity Swaps in China in Structured-Product Push (Bloomberg) Chinese regulators last month decided to allow UBS to trade total return swaps, Thomas Fang, the bank’s managing director for equities derivatives sales for Asia, said in a phone interview. The bank will use the derivatives to create structured products tied to local stocks, with plans to boost the size of its staff in the country for the business, Fang said. The China Securities Regulatory Commission’s press office didn’t immediately respond to a faxed request for confirmation. A Tax That May Change The Trading Game (NYT) The tax would be tiny for investors who buy and hold, but could prove to be significant for traders who place millions of orders a day. Under the proposal, a trade of shares worth 10,000 euros would face a tax of one-tenth of 1 percent, or 10 euros. A trade of a derivative would face a tax of one-hundredth of 1 percent. But that tax would be applied to the notional value, which can be very large relative to the cost of the derivative. So a credit-default swap on 1 million euros of debt would have a tax of 100 euros, or about 0.4 percent of the annual premium on such a swap. On Currencies, What's Fair Is Hard to Say (WSJ) What's the fair value of a euro? That depends on whether the answer comes from Berlin or Paris. German Chancellor Angela Merkel on Wednesday weighed in on what the currency should be worth, saying the euro's exchange rate is "normal in the historical context." French Finance Minister Pierre Moscovici had a different take earlier this month, calling the euro "perhaps too strong." Economists say Ms. Merkel is right—technically. The euro's buying power is roughly where it should be, according to the Peterson Institute for International Economics, which judges currencies based on countries' current-account balance. But others caution Germany's relatively robust economy props up the euro's value; if weaker countries like Spain or Italy still had their own currencies, they'd be worth much less. Singapore GDP Growth Beats Initial Estimate as Asia Recovers (Bloomberg) Gross domestic product rose an annualized 3.3 percent in the three months through December from the previous quarter, when it shrank a revised 4.6 percent, the Trade Ministry said in a statement today. That compares with a January estimate of 1.8 percent and the median in a Bloomberg News survey for a 2 percent expansion. KFC employee fired for making out with boob-shaped mashed potatoes (DD) A KFC employee in Tennessee is out of a job after photos of the culprit making out with a plate of mashed potatoes ended up on Facebook. The mashed potatoes, which were apparently not served to some unknowing customer, had been arranged into the shape of a woman's boob. In the photos, the former employee can be found licking what we'd have to consider the underboob of the mashed potato mammary before throwing it into an oven. The photo became public information when it showed up on the Facebook page for Johnson City, Tenn., news channel WJHL, where it was shared 2,000 times and received more than 700 comments. Once the news organization was able to determine its locational origin—the KFC on North Roan Street—the suspected employee was terminated. KFC spokesman Rick Maynard confirmed the firing but would not name the culprit because that "wouldn't be appropriate." He stressed that the employee who took the photos is no longer with the company. "Nothing is more important to KFC than food safety," he wrote to WJHL. "As soon as our franchisee became aware of the issue, immediate action was taken.