Skip to main content
Opening Bell: 2.2.22

Opening Bell: 2.2.22

The pandemic’s over (in one respect); it’s very much not in another; P.E. Shaw; Dorsey dunks on Zuck; and more!

The pandemic’s over (in one respect); it’s very much not in another; P.E. Shaw; Dorsey dunks on Zuck; and more!

For Markets, the January Selloff Marks the End of the Pandemic [WSJ]
Some in Wall Street have been worried about the possibility of a bubble, as evidenced by the manias surrounding “meme stocks,” blank-check investment vehicles and cryptocurrencies. Most analysts, however, argued that the bull market was a rational response to the fast rebound in economic activity and the Fed taking rates lower to stimulate the economy. When rates are lower, the same stream of cash is more attractive, which justifies higher equity valuations…. Other indicators also suggest stocks are oversold. Volatility is elevated and individual investor sentiment is gloomy. Meanwhile, high-yield bonds remain well behaved, suggesting traders don’t really see the economy heading over a cliff. And even if rates rise, the market is rightly skeptical that the Fed will take them above 2%.

Companies unexpectedly cut 301,000 jobs in January as omicron slams labor market, ADP says [CNBC]
It was the first time ADP reported negative job growth since December 2020.
The pandemic-sensitive leisure and hospitality industry was responsible for more than half of the decline, as companies reported a drop of 154,000. Trade, transportation and utilities cut 62,000 while the other services category declined by 23,000.

D.E. Shaw Seeks $500 Million for First Private Equity Fund [Bloomberg]
The D.E. Shaw Voltaic Fund… has already gathered almost $200 million in commitments, a chunk of which is the firm’s money, one the people said. It will focus on growth equity companies and have a five-year time horizon…. While Voltaic is D.E. Shaw’s first standalone vehicle to invest in the equity of private companies, the firm has been making such investments through its main hedge funds for years. It has made private bets in the technology space since the 1990s and in renewable energy since the mid-2000s. It has also has moved into private credit.

Startup Investors Cut Valuations Amid Tech Stock Rout, Dismal IPOs [WSJ]
Venture capitalists say a significant reset in investment behavior is beginning to take hold that is poised to reduce initial public offerings, leave some companies short of funding and crimp valuations.
Investors say several large startup backers are cutting back their investments, curtailing a flow that sprayed at full blast for most of the pandemic, particularly for older, more mature startups. And venture firms say they are advising their companies to prepare to conserve cash in a tougher funding environment….
“It’s harder to raise today than it was six months ago,” said Peter Fishman, a longtime Silicon Valley tech professional and chief executive of data-automation startup Mozart Data Inc., which he founded during the pandemic. “It is a pop of irrational exuberance.”

Crypto start-ups are still raising serious cash despite a slump in prices [CNBC]
Several privately-held firms announced bumper cash injections in January. Crypto exchange FTX and its U.S. affiliate raised a combined $800 million, valuing the companies at $32 billion and $8 billion respectively.
Fireblocks, a crypto infrastructure start-up, was valued at $8 billion in a $550 million round, while rival Blockdaemon scored $155 million on a $1.3 billion valuation. … “I think that there’s been a pretty big dislocation between public and private markets,” said Sam Bankman-Fried, CEO and co-founder of FTX.

Dorsey Says Zuckerberg Should Have Focused on Bitcoin, Not Diem [Bloomberg]
“They tried to create a currency that was owned by Facebook -- probably for the right reasons, probably for noble reasons -- but there were also some reasons that would indicate trying to get more and more people onto the Facebook ecosystem,” Dorsey said Tuesday at the MicroStrategy World conference. “They did that instead of using an open protocol and standard like Bitcoin.”
“Hopefully they learned a lot, but I think there was a lot of wasted effort and time,” he added. “Those two years or three years, or however long it’s been, could have been spent making Bitcoin more accessible for more people around the world, which would also benefit their Messenger product and Instagram and WhatsApp.”

Related

bitcoin ether
Opening Bell

Opening Bell: 9.16.21

Elect take aim at ARK; p.e. secondaries buyer seeks one of its own; Elizabeth Warren’s sending letters again; and more!

Zuckerberg Libra
Opening Bell

Opening Bell 10.24.19

Sucks to Zuck ...

jack dorsey
Opening Bell

Opening Bell: 11.29.21

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

lordstown endurance
Opening Bell

Opening Bell: 3.19.21

“I don’t think companies are supposed to be speculating with their cash balances”; fraud, fraud everywhere; p.e. movers; and more!

Opening Bell

Opening Bell: 09.06.12

Draghi Says Officials Agree On ECB Unlimited Bond-Buying (Bloomberg) The program “will enable us to address severe distortions in government bond markets which originate from, in particular, unfounded fears on the part of investors of the reversibility of the euro,” Draghi said at a press conference in Frankfurt after the ECB held its benchmark rate at a record low of 0.75 percent. “Under appropriate conditions, we will have a fully effective backstop to avoid destructive scenarios with potentially severe challenges for price stability in the euro area.” Positive Signs Emerge For Job Market (WSJ) Private-sector jobs in the U.S. increased by 201,000 last month, according to a national employment report calculated by payroll processor Automatic Data Processing Inc. and consultancy Macroeconomic Advisers. The August number was well above the 145,000 expected by economists. The July estimate was revised to 173,000 from the 163,000 reported last month. AIG To Sell $2 Billion Of AIA Shares (WSJ) AIG is seeking to raise around US$2 billion by selling more shares in AIA Group Ltd, its former pan-Asian life insurance unit, as it continues to repay the U.S. government bailout it received during the 2008 financial crisis. The U.S. insurer also said in a statement it plans to buy back another $5 billion in stock from the U.S. Treasury. AIG has been aggressively buying back shares this year and is expected to buy more from the Treasury this fall, as part of a push that could make the U.S. government a minority shareholder before the November elections and enable the company to fully repay its bailout sooner than expected. The Treasury Department sold $5 billion worth of shares in AIG last month, its fourth sale so far, reducing the government's stake to 55% and bringing down the amount the government needs to recoup from the bailout to $25 billion. Summer Rally Puts The Hurt On Fund Managers (WSJ) "The gap we are looking at is going to be very hard…for hedge funds to make up," said Anurag Bhardwaj, head of hedge-fund consulting at Barclays PLC. "At this late stage in the year, when the rally has been around for a bit, do you decide to get into the game now?" Alec Baldwin's daughter discusses ‘pig’ call (NYP) Alec Baldwin’s daughter Ireland has talked for the first time about his infamous 2007 voice mail in which he called her, then 12, “a rude, thoughtless, little pig” — saying he often speaks like that “because he’s frustrated.” Ireland, the 16-year-old daughter of Baldwin and Kim Basinger, thinks the incident — which created a viral scandal and prompted Baldwin to temporarily lose visitation rights — was blown wildly out of proportion. “The only problem with that voice mail was that people made it out to be a way bigger deal than it was,” she tells Page Six Magazine, out today. “He’s said stuff like that before just because he’s frustrated. “For me it was like, ‘OK, whatever.’ I called him back I was like, ‘Sorry Dad, I didn’t have my phone.’ That was it.” DE Shaw Is Back On Top (DJ) This year, Shaw has had the biggest asset growth among the top 20 hedge fund firms in Absolute Return’s Billion Dollar Club, which tracks the biggest hedgies twice a year. Shaw added $2.4 billion to its hedge-fund coffers this year, a 14 percent gain, bringing its assets to $19.4 billion as of July 1, according to the ranking out today. Clinton Nominates Obama, Rebuts Romney Criticism On Jobs (Bloomberg) Bill Clinton said President Barack Obama deserves re-election because he contained the economic crisis and put the nation on a path to recovery, casting the 2012 election as a choice between “shared opportunities and shared responsibility” and a “winner-take-all, you’re-on-your- own society.” Clinton, 66, praised Obama’s commitment to “constructive cooperation” and described him as a man who is “cool on the outside, but who burns for America on the inside.” The former president used a 48-minute address before the Democratic National Convention in Charlotte, North Carolina, last night to deliver a rebuttal of criticisms leveled at Obama by challenger Mitt Romney and his running mate during last week’s Republican National Convention in Tampa, Florida -- at one point saying it “takes some brass” for Obama’s partisan adversaries to lob some of their attacks. “Nobody’s right all the time and a broken clock is right twice a day,” Clinton said. “We’re compelled to spend our fleeting lives between those two extremes.” Most Of Nomura's Cuts To Come In Europe, US (WSJ) The brokerage house said Thursday 45% of the cuts would be in Europe and 21% in the U.S. Nomura said 45% of the total cuts would be in the form of labor costs. Love Triangle Leads To Million-Dollar Return Battle At Neiman Marcus (FDL) The meeting was awkward. Malcolm Reuben, the buttoned-up vice president and general manager of Neiman Marcus’ NorthPark Center store, stood inside the multimillion-dollar Addison home of one of his top customers, Patricia Walker. Beside him were two colleagues: a Neiman Marcus attorney and his store’s loss-prevention manager. Walker was joined by her own attorney and her personal assistant. It was a summer day in 2010. Glancing around the sleek Max Levy–designed house, the only things more dazzling than the sculptural masonry columns or the steel-and-glass staircase were the piles of designer goods: handbags, shoes, furs, clothing, crystal figurines, fine jewelry. It represented the bulk of $1.4 million in merchandise charged to Walker over a period of years. “There was a variety of merchandise laying all over the house,” Reuben testified in a March video deposition. “She wanted to return all of the merchandise because of the affair.” Oh, yes. The affair. Walker had learned that Favi Lo, her longtime Neiman Marcus sales associate at NorthPark, was sleeping with her husband. And Walker saw that her charges had soared in recent years while she recovered from a horrific head-on auto collision. She came to believe that her husband was responsible for many of the purchases and had used them to pump up commissions for his mistress.

Opening Bell

Opening Bell: 02.15.13

SEC Looks At Trades A Day Before Heinz Deal (NYT) Regulators are scrutinizing unusual trading surrounding the planned $23 billion takeover of the food company H. J. Heinz, raising questions about potential illegal activity in one of the biggest deals in recent memory, a person briefed on the matter said. The Securities and Exchange Commission opened an insider trading inquiry on Thursday as Berkshire Hathaway and the investment firm 3G Capital agreed to pay $72.50 a share for Heinz, this person said. Regulators first noticed a suspicious spike in trading on Wednesday. Deferred Pay Draws Fed's Scrutiny (WSJ) U.S. banks and securities firms would have to step up their compensation disclosures under rules being considered by the Federal Reserve, said a person familiar with the central bank's regulatory efforts. The rules are in the formative stages and wouldn't take effect for some time. But an early draft has circulated internally at the Fed, this person said, marking a step on the path toward a public proposal. The Fed's push ultimately could give investors sheaves of new data on how and when companies pay their employees—including scarce numbers on how much compensation has been promised but not yet paid out. Shifting Blame Muddles S&P Suit (WSJ) The Delphinus deal, which means "dolphin" in Latin and is the name of a small constellation in the Northern Hemisphere, was one of more than 30 CDOs included in the federal government's lawsuit against Standard & Poor's Ratings Services last week. Federal prosecutors say that S&P, a unit of McGraw-Hill Cos., disregarded its own standards when rating Delphinus and the other CDOs, misled investors and should cover losses suffered by federally insured banks and credit unions that bought the securities, which included bundles of subprime mortgages. The discrepancy could give S&P a way to counterattack the Justice Department as the two sides gird for a battle that legal experts say will be grueling. U.S. Attorney General Eric Holder is seeking more than $5 billion in damages from S&P, which claims the allegations are "meritless." The U.S. government's conflicting opinions about the Delphinus deal might be a problem if the civil-fraud suit goes to trial. The ratings firm probably will argue that "these banks aren't victims," says Samuel Buell, a former federal prosecutor who now is a law professor at Duke University. Ackman: Herbalife Short Unaffected By Icahn Stake (CNBC) In his first public comments following the disclosure of activist investor Carl Icahn's stake in Herbalife, hedge fund manager Bill Ackman, who made $1 billion short bet against the stock, told CNBC he remains convinced that "Herbalife is a pyramid scheme." Ackman's statement read, "We invest based on a careful analysis of the facts. After 18 months of due diligence, we have concluded that it is a certainty that Herbalife is a pyramid scheme. Our conclusions are unaffected by who is on the other side of the investment. Our goal was to shine a spotlight on Herbalife. To the extent Mr. Icahn is helping achieve this objective, we welcome his involvement." G-20 Seeks Common Ground on Currencies After Yen Split (Bloomberg) Group of 20 finance ministers and central bankers begin talks in Moscow today with investors seeking clarity on how comfortable they are with a sliding yen. Questions are being asked after the Group of Seven united around a pledge not to target exchange rates only to divide over its meaning for Japan. “We have to get to the bottom of this, of course, listen to our Japanese colleagues and how they explain this and what decisions they will take and what exchange-rate policy they will follow,” Russian Finance Minister Anton Siluanov said in an interview yesterday before hosting the meeting. He said the G-20 should adopt more “specific” language opposing exchange-rate interference in a statement to be released tomorrow. Corvette's stick shift thwarts Orlando man (OS) Orlando police said the 20-year-old tried to carjack a man inside a Corvette near Orlando Regional Medical Center late last month, but couldn't steal the car because he didn't know how to use the clutch or stick-shift. He and his accomplice ran away from the car, but not before stealing the victim's wallet and cell phone, police said. Soon after the failed carjacking, the victim's credit card was used at a McDonald's on Kirkman Road. Surveillance video inside the restaurant showed Sayles at the register, placing an order at about 12:15 a.m. Jan. 28. Not long after, the stolen cellphone's internal GPS registered with the phone company. Authorities tracked the phone to a home on Grandiflora Drive in a neighborhood off Kirkman Road. On Feb. 8, police went to the home, and Sayles answered the door. Officers noted in their arrest report that they immediately recognized him from the surveillance video inside the McDonald's. When asked why the victim's stolen cellphone would detect at his house, the report said, Sayles said a lot of people come to his residence and they could have brought it. One-Man Bank Keeps German Village Business Running (Reuters) The Raiffeisen Gammesfeld eG cooperative bank in southern Germany is one of the country's 10 smallest banks by deposits and is the only one to be run by just one member of staff. Small banks like this dominate the German banking landscape. Rooted in communities, they offer a limited range of accounts and loans to personal and local business customers. While numbers have shrunk from around 7,000 in the 1970s to around 1,100 now, cooperative banks like Raiffeisen Gammesfeld provide competition for Germany's two largest banks - Deutsche Bank and Commerzbank. A typical day's work for Breiter involves providing villagers with cash for their day-to-day needs and arranging small loans for local businesses. Not to mention cleaning the one-story building that houses the bank, which is 200 meters from his own front door. Moving from a bigger bank, where it was all "sell, sell, sell", Gammesfeld-born Breiter says taking up this job in 2008 was the best decision he ever made. The advertisement required someone to work by hand, without computers. The typewriter and the adding machine bear the signs of constant use, although Breiter, in his standard work outfit of jeans and jumper, does now have a computer. "It's so much fun," Breiter, a keen mathematician, says as he deals with a steady stream of lunchtime customers. He knows his customers by name and regularly offers advice on jobs, relationship and money woes. Ex-Analyst At SAC Felt Pressured For Tips (WSJ) The Federal Bureau of Investigation and the Manhattan U.S. Attorney's office now are using the statements from the analyst to try to build a case against the SAC portfolio manager, Michael Steinberg, and others that could result in charges in the coming months, these people said. Authorities currently are preparing to present evidence to a grand jury against Mr. Steinberg, according to a person familiar with the investigation. The development ramps up the legal pressure on the big hedge fund, highlighting that the previously reported insider-trading investigation of SAC and its founder, Steven A. Cohen, is proceeding on multiple fronts. Blackstone Keeps Most Of Its Money With SAC (NYT) The Blackstone Group, the largest outside investor in the hedge fund SAC Capital Advisors, said it would keep most of its $550 million with the hedge fund for three more months while it monitors developments in the government's insider trading investigation. Performance Tops Pedigree in Money Managers’ Fortunes (Bloomberg) Virtus Investment Partners Inc. and Artio Global Investors Inc. set out on their own in 2009 within nine months of one another. The paths of the two money managers couldn’t have been more different. Virtus, which started as a virtually unknown money manager, has surged 18-fold since its public debut as assets have soared, with its shares hitting a record on Feb. 14. Artio, which listed in September 2009 after spinning out from Switzerland’s 122- year-old wealth manager Julius Baer Group Ltd., saw its life as an independent firm come to an abrupt end with its Feb. 14 acquisition by Aberdeen Asset Management Plc after assets slumped and shares plunged about 90 percent. Banks Warned Not To Leave Libor (WSJ) The Financial Services Authority recently sent letters to a handful of major banks—including France's BNP Paribas SA and the Netherlands' Rabobank Group—warning them not to pull out of the panel that sets the London interbank offered rate, or Libor, these people said. The letters came after executives at those banks privately informed the British Bankers' Association, the trade organization that oversees Libor, that they planned to exit the rate-setting panel. Australian couple get married in IKEA (DM) Lynne said: 'We wanted to get married in IKEA for a very simple reason - we adore IKEA. 'It felt right to be able to show our commitment to one another by getting married somewhere we both love and to show the world that romance can be alive anywhere, even in the aisles of IKEA. Our visits to IKEA over the years have actually brought the two of us closer!' Every element of the special day featured IKEA products handpicked by the happy couple, including crockery, lighting, dining furniture, decorations, glassware and meatballs.

Opening Bell

Opening Bell: 12.10.12

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.

Opening Bell

Opening Bell: 10.19.12

Schapiro SEC Reign Nears End With Rescue Mission Not Done (Bloomberg) Admirers and critics agree Schapiro rescued the agency from the threat of extinction when she was appointed by President Barack Obama four years ago. Still, she hasn’t fulfilled her mission -- to overcome the SEC’s image as a failed watchdog by punishing those who steered the financial system toward disaster and by proving regulators can head off future breakdowns. “It was harder than I thought it was going to be,” Schapiro, 57, said during an interview in her office that looks out on the Capitol dome. “You have this nice little box of things you want to do all tied up with a bow, and you walk in the door and it’s very hard to keep at least one eye on that agenda while you’re dealing with the flash crashes and the new legislation and the whole range of things that happened,” she said. Morgan Stanley CEO Hints Of Commodity Arm Sale (Reuters) Morgan Stanley has an obligation to explore "different structures" for its commodities trading business because new regulations are limiting the unit's activities, Chief Executive James Gorman said on Thursday. The CEO's comments were the first time Morgan Stanley has publicly hinted at a possible sale of its multibillion-dollar oil and metals trading arm, which has been reported in the media for months. Morgan Stanley has been in discussions with OPEC member Qatar for more than a year over the sale of at least a majority stake in its energy-focused trading business, according to bankers. Speaking on a conference call with analysts after the firm reported better-than-expected quarterly results on Thursday, Gorman said changes under the U.S.' Dodd-Frank financial reform law restrict the kind of trading the firm can do in commodities. Europe Agrees On Banking Supervisor (WSJ) European leaders early Friday agreed to have a new supervisor for euro-zone banks up and running next year, a step that will pave the way for the bloc's bailout fund to pump capital directly into banks throughout the single-currency area. John Paulson Doubles Down On Housing (WSJ) Hedge-fund manager John Paulson famously made nearly $4 billion in 2007 correctly betting that the housing bubble, fueled by the subprime mortgage market, would pop. Then the billionaire investor somewhat reversed course, arguing that the housing cycle had hit a low point. "If you don't own a home, buy one," he said in a 2010 speech at the University Club in New York. "If you own one home, buy another one, and if you own two homes, buy a third and lend your relatives the money to buy a home." So far, that bet has been a loser: The Wall Street tycoon lost about $3 billion personally in 2011, according to people close to the hedge-fund manager, speculating that the economy would recover faster than it did. But through the downturn Mr. Paulson—whose net worth is estimated to be around $11 billion, according to people familiar with his situation—continued his real estate spending spree. Over the last eight years, he has spent more than $145 million on six properties, including two estates in Southampton, N.Y., two properties near Aspen, Colo., and two residences in Manhattan, where he is based, according to public records. (He later sold one of the Southampton properties, for $10 million in 2009, a year after buying a larger estate nearby). In June, Mr. Paulson snapped up a 90-acre Aspen ranch and an adjoining property from Prince Bandar bin Sultan for a total of $49 million, according to public records, one of the highest prices ever paid for property in the area. Ben Stein: Taxes Are Too Low (Mediaite) Author and economist Ben Stein joined Fox & Friends on Thursday where he stunned the hosts after he called for raising the tax rates on people making more than $2 million per year. He said that he did not think that the United States simply had a spending problem, and cited the early post-war period as an example of a time when you could have high tax rates and high growth. “I hate to say this on Fox – I hope I’ll be allowed to leave here alive – but I don’t think there is any way we can cut spending enough to make a meaningful difference,” said Stein. “We’re going to have to raise taxes on very, very rich people. People with incomes of, say, $2, $3, $4 million a year and up. And then slowly, slowly, slowly move it down. $250,000 a year, that’s not a rich person.” Stein said that the government has a spending problem, but they also have a “too low taxes problem.” “With all due respect to Fox, who I love like brothers and sisters, taxes are too low,” said Stein. “That sounds like Bowles-Simpson,” said Gretchen Carlson. “It is Bowles-Simpson,” Stein replied. Should've Left That At Home, Teacher Is Told On Jury Duty (NYT) Damian Esteban was qualified to teach students at a specialized New York City high school, and had just been deemed reasonable enough to judge a man’s fate in a murder trial. But passing through the metal detectors at a Manhattan courthouse may have been too tough a test. Mr. Esteban, 33, was arrested on Wednesday as he returned from a break in a trial in State Supreme Court in Manhattan, David Bookstaver, a spokesman for the state Office of Court Administration, said. As Mr. Esteban, a teacher at the Williamsburg School of Architecture and Design in Brooklyn, passed through a metal detector at the courthouse, it beeped. A court officer, Laura Cannon, found the culprit to be a cigarette box in Mr. Esteban’s pocket. Upon opening the cigarette box, Ms. Cannon reported that she found a much bigger problem: 18 small bags of heroin. A Daunting To-Do List For Citigroup's New CEO (BusinessWeek) Citigroup’s largest problem may be internal. The company, analyst Richard Bove says, “is a political swamp. It’s a snake pit.” Cleansing the culture must be a priority, says Mike Mayo, an analyst at Crédit Agricole Securities. “So whether it’s the inappropriate pay for subpar performance; the lack of adequate disclosure, such as returns by business line; the failure to properly oversee the many different businesses; or the poor tone set at the top of the firm for corporate governance, they all add up to the need to improve the culture,” Mayo says. Cooling The Pits: ICE Yelling Ends (WSJ) Augustine Lauria knew his 37-year career as a floor trader was over when he got a memo from IntercontinentalExchange in late July announcing the closing of the exchange operator's last trading pits. Friday will be the last chance the 61-year-old trader will get to put on his navy-blue and yellow trading jacket and badge. It will be the final day of rough-and-tumble "open-outcry" commodities trading on the ICE-owned pits in lower Manhattan where options on cotton, coffee, cocoa, sugar and orange juice are bought and sold. "What can I do? I can count fast and yell loud," says Mr. Lauria, who boards the Staten Island Ferry before sunrise to get to work in time for the 8:10 a.m. bell. Amanda Larrivee Speaks Out about Incident at Samuel’s (ABC) Amanda Larrivee and her brother Robert Larrivee were arrested at Samuels Sports Bar Sunday for allegedly stealing TV’s from the bathroom. Now, the woman involved is speaking out about what happened that night and the “immature” remark made by her brother. The legal case against Amanda has been dropped, but a comment made by her brother is getting all the attention. He told police that the two were in the bathroom having sex. Amanda says that was not the case. “The comment was taken out of context and it’s not what it looks like,” said Larrivee...“I just want to come out and really let people know that it’s not what it looked like. It’s humiliating and the comment having sexual relations with my brother was an impulse, immature comment made by him that is not the truth,” said Larrivee. Amanda says Robert wasn’t trying to steal the TV’s, but was upset over seeing his ex-girlfriend. “He had an outburst at the time you know it turned into you know touching the TV on the wall, turned into an ugly scene,” said Larrivee. “He took the televisions down. He had no intention of stealing. He’s not walking out with two televisions,” said Attorney Jack St. Clair.