Opening Bell: 10.4.21

Evergrande grinds to a halt; Schrödinger’s digital media company; Jamie Dimon wants a f**cking standing O; and more!

Author:
Dealbreaker
Publish date:
Oct 4, 2021

Daderot, Public domain, via Wikimedia Commons

Evergrande grinds to a halt; Schrödinger’s digital media company; Jamie Dimon wants a f**cking standing O; and more!

China Evergrande’s shares are halted as doubts swirl. [NYT]
Evergrande said in a filing that its shares were halted ahead of an announcement about a “major transaction.” It gave no additional details…. Evergrande is under pressure from contractors and employees who are owed more than $300 billion in unpaid bills, as well as home buyers who are waiting on as many as 1.6 million unfinished apartments. In recent days, Wall Street banks and financial sleuths have been uncovering other liabilities that Evergrande may have in the form of guarantees that may add to its towering debt pile.

Countdown Starts on Chinese Company Delistings After Long U.S.-China Audit Fight [WSJ]
The SEC expects that U.S. regulators could flag Chinese companies in 2022 if they don’t get access to audit work involving 2021 financials of those companies, a person familiar with the matter said…. The looming threat of delistings gives U.S. officials key leverage on the negotiating table against the Chinese side. “If the U.S. is going to have any success at the negotiating table, this legislation has got to be implemented,” said Mr. Das, who is now a lawyer at King & Spalding LLP in Washington.

Ozy Media CEO claims his scandal-ridden company will reopen, but doesn’t explain how [CNBC]
Watson had informed employees Friday that the board had voted to shut down the company…. “We were premature,” Watson said of the decision in an interview on CNBC’s “Squawk Box.” He added that over the weekend, the company had “good conversations” with investors and advertisers….
“We definitively made some mistakes ... I know we want to have larger conversations about whether mistakes are ingrained in who we are or whether, like a lot of young companies, we made mistakes but that was the 20%, not the 80% of who we are,” Watson told CNBC.

Fed Prepares to Launch Review of Possible Central Bank Digital Currency [WSJ]
Fed officials are divided on the matter, making it unlikely they will decide any time soon on whether to create a digital dollar…. “It’s just very hard for me to imagine that the U.S., given the status of the dollar as a dominant currency in international payments, wouldn’t come to the table in that circumstance with a similar kind of an offering,” [Federal Reserve Gov. Lael Brainard] said…. Randal Quarles, the central bank’s pointman on financial regulation, has voiced more skepticism about the need for a Fed digital currency. He said this summer that the U.S. dollar is already “highly digitized” and expressed doubts that a Fed CBDC would help draw people without bank accounts into the financial system—a goal that can be accomplished through other means, he said.

JPMorgan boss Jamie Dimon defends $30M-per-year salary [N.Y. Post]
“The board decides what I make,” Dimon told Axios co-founder James VandeHei in an interview that aired Sunday evening…. VandeHei suggested that Dimon — who’s worth about $2 billion, according to Forbes — could ask the board to cut his pay, but Dimon responded that JPMorgan’s board would take offense, adding that the CEO’s pay is part of an “umbrella” plan designed to retain executives…. “They could all sell their services elsewhere. I need to maintain the best team on the playing field. And I need to pay them fairly to do that. You may not like that, but that’s what it is.”

UK app-only bank Monzo withdraws U.S. banking license application [CNBC]
“While this isn’t the outcome we initially set out to achieve, this allows us to build and scale our early-stage product offer in the U.S. through existing partners and invest further in the U.K. We have big ambitions for Monzo U.S. There are many routes to market we’re exploring that have been successful for other market entrants who are now major players.”

Opening Bell

Jamie Dimon’s disappointed; on second thought, Ozy will look into the whole ‘impersonating a YouTube exec in a fundraising call with Goldman Sachs,’ and more!

Opening Bell

Standing pat; buyouts bloom; dashing Dimon; and more!

Opening Bell

Warren, Jamie and Jeff to save American healthcare; Apple in trouble; Yellen walks away a winner; Jamie Dimon has a stalker who isn't us; and more!

Opening Bell

Investors boo Boris’ survival; Jamie Dimon’s economist doesn’t agree with Jamie Dimon; Larry Fink can’t go to Moscow; and more!

Opening Bell

Trump faces the dollar down; Jamie Dimon likes the universal basic income; the super-rich are preparing for annihilation; and more.

Opening Bell

UBS Says Cleaning Up Its Act After Libor 'Shocker' (Reuters) UBS has yet to fully purge itself of a global interest rate scandal that has cost the Swiss bank its reputation and put it at risk of a wave of costly civil suits, its investment banking chief said on Wednesday. The once-venerable institution was fined a record $1.5 billion last month for manipulating Libor interest rates, the latest in a string of scandals including a $2.3 billion rogue trading loss and a damaging tax avoidance row with the United States. "We are very focused on recovering the honor and standing the organisation had in the past," Andrea Orcel told Britain's Parliamentary Commission on Banking Standards, set up in the aftermath of the Libor scandal. "I am convinced that we have made a lot of progress. I am also convinced that we still need to do more." [...] Committee member Justin Welby, the incoming Archbishop of Canterbury, asked Orcel if he was the right man to turn UBS around. "I feel I have a high level of integrity," the banker said. Orcel said that UBS was working at simplifying the investment banking business to make it less risky and prone to scandal. The committee, a cross-party panel of lawmakers headed by Conservative MP Andrew Tyrie, is switching its focus to standards and culture after spending most of the past three months assessing structural reform. Tyrie on Wednesday described the Libor rigging as "a shocker of enormous proportions". Button-Down Central Bank Bets It All (WSJ) Switzerland, for decades a paragon of safety in finance, is engaged in a high-risk strategy to protect its export-driven economy, literally betting the bank in a fight to contain the prices of Swiss products sold abroad. The nation's central bank is printing and selling as many Swiss francs as needed to keep its currency from climbing against the euro, wagering an amount approaching Switzerland's total national output, and, in the process, turning from button-down conservative to the globe's biggest risk-taker. JPMorgan Overhaul Widens (WSJ) The shift of Mr. Maclin and the departure of Mr. Staley, who once was seen as a top candidate to succeed James Dimon as chief executive, are the latest steps in a drastic reshaping of J.P. Morgan's executive suite. Many of the new leaders—a group that includes corporate and investment-bank co-heads Mike Cavanagh and Daniel Pinto, co-chief operating officer Matthew Zames and Chief Financial Officer Marianne Lake—are in their 40s. Mr. Cavanagh and Mr. Zames, who were asked last May to unwind a series of botched bets placed by a trader in the bank's Chief Investment Office known as the "London whale," are viewed as front runners for the top job, said people close to the bank. Ackman Braces for Legal Battle Over Herbalife (FBN) If filed, the lawsuit could involve alleged “tortuous interference,” implying Ackman intentionally damaged Herbalife’s business relationships, people close to Ackman said. On Tuesday, a large Herbalife distributor said he was leaving the company and called on other distributors to join him amid the controversy. In a sign of the importance of its distribution channels, Herbalife says in regulatory filings its relationship with and ability to influence distributors are items that can “materially” affect its financial condition. As of late Tuesday, people with knowledge of the matter said no decision on timing or even if a lawsuit will actually be filed had been made. The company has told FOX Business it is weighing legal action against Ackman. Ackman declined to comment on the matter. Herbalife has hired famed attorney David Boies to launch possible litigation against Ackman as well as the investment bank Moelis & Co., as its financial adviser. Goldman Will Report Fund Values Each Day (WSJ) In a reversal of industry practice, Goldman Sachs Group will begin disclosing the values of its money-market mutual funds daily rather than monthly, according to people familiar with the company's plans. Some of the changes will take effect as early as Wednesday...According to people familiar with Goldman's thinking, the company is beefing up its disclosures to satisfy investors' calls for greater transparency on fluctuations in the price of their investments. Brazil prostitutes to learn English ahead of World Cup (AP) Prostitutes in one of Brazil's biggest cities are beginning to sign up for free English classes ahead of this year's Confederations Cup and the 2014 World Cup. The president of the Association of Prostitutes of the city of Belo Horizonte says by telephone that 20 have already signed up for the courses and she expects at least 300 of the group's 4,000 members to follow suit. The association is organizing the classes and seeking volunteer teachers. Prostitution is legal in Brazil. Belo Horizonte will host six World Cup matches and Vieira said Tuesday "it will be important for the girls will be able to use English to let their clients know what they are charging and learn about what turns them on." AIG Cites Duty to Weigh Suing U.S. as Lawmaker Criticism Mounts (Bloomberg, related) American International Group said it has a duty to weigh joining a suit by former Chief Executive Officer Maurice “Hank” Greenberg that claims the insurer’s 2008 U.S. bailout was unconstitutional. “The board of directors has fiduciary and legal obligations to the company and its shareholders to consider the demand served on us,” CEO Robert Benmosche said yesterday in a statement. The board is scheduled to meet today to hear arguments from representatives of Greenberg and the U.S. Lawmakers including Senators Elizabeth Warren and Robert Menendez and Representative Peter Welch said New York-based AIG shouldn’t join the suit. “Taxpayers are still furious that they rescued a company whose own conduct brought it down,” Welch said in a letter to AIG Chairman Steve Miller. “Don’t rub salt in the wounds with yet another reckless decision.” Vow of New Light For 'Dark' Trades (WSJ) Richard Ketchum, chief executive of the Financial Industry Regulatory Authority, said in an interview Tuesday that the regulator is expanding its oversight of the dark-trading venues, with an eye on whether orders placed in public exchanges are "trying to move prices or encourage sellers that may advance their trading in the dark market." The regulator also is boosting its surveillance of high-speed trading and is increasingly looking at rapid-fire trading across exchanges, he said. "You're going to see more [focus] in those areas in 2013," Mr. Ketchum said. Goldman, Morgan Stanley to Settle on Foreclosures (Reuters) Goldman Sachs and Morgan Stanley are among a group of banks expected to agree as soon as this week to a $1.5 billion settlement with federal regulators over botched foreclosure claims, two sources familiar with the matter said on Tuesday. The accord would come on the heels of a separate $8.5 billion settlement announced on Monday with 10 bigger mortgage servicers, including Bank of America, Citigroup, JPMorgan Chase, Wells Fargo...Goldman and Morgan Stanley's respective roles in the settlement stems from mortgage-servicing businesses that the two investment banks purchased in the run-up to the subprime mortgage crisis, and have since sold. Goldman had owned Litton Loan Servicing and Morgan Stanley owned Saxon Capital. Taco Bell responds to teen's request for a custom Speedo (LI) The week before Christmas, 15-year-old Ryan Klarner posted on Taco Bell’s Facebook page, introducing himself with a rundown of his swimming and diving achievements before making an offbeat request. “[I]s there any way you guys could make me a customized Speedo that says think outside the buns on the back of it? If you did, that would mean the world to me,” the Illinois teen asked...Klarner said he first came up with the idea a couple of years earlier and decided last month to go ahead and ask, even though he never had asked a company on Facebook for anything before. “I did not expect it to blow up as much as it has. I didn’t really expect to get the Speedo out of it, either,” he said. But last Wednesday, the social media team at Taco Bell wrote back. “What size do you wear? And what’s your address?” “He really wanted something and he went after it,” Tressie Lieberman, director of digital and social engagement, said. When we think people are really extraordinary...then we want to reward them.”