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Janet Yellen warns of 'enormous' economic repercussions from war in Ukraine [CNN]
The war -- and the political response of the West, led by sanctions -- has already sent food and energy prices soaring and has raised concerns about an economic slowdown or even recession during a time of already rampant inflation around the world. In the United States, inflation is at a level not seen in 40 years…. "We are witnessing the vulnerability that comes from relying on one fuel source or one trade partner," Yellen said, which is why it is imperative to diversify energy sources and suppliers."

SEC Says Employees Improperly Accessed Privileged Legal Records [WSJ]
“It’s the equivalent of a party in litigation having access to a judge’s briefs from her law clerks,” said Nick Morgan, an attorney at Paul Hastings LLP who defends people in SEC investigations. “This breach reinforces the problem with the SEC’s administrative process in which the commission has total discretion to deprive parties of their ability to have matters litigated in federal court.”

Insurers Still Provide Cover for Private Equity [WSJ]
Rates may not be rising enough to incentivize insurers to significantly shift into more plain-vanilla investments. Notably, insurers in Goldman’s survey most often named inflation as their top macroeconomic concern, more so than credit- and equity-market volatility.

JetBlue Offers $3.6 Billion for Spirit, Disrupting Rival Bid [Bloomberg via Yahoo!]
Frontier criticized the competing offer, saying such a combination would raise fares and reduce flight options. It also questioned JetBlue’s effort in light of an unrelated federal lawsuit to block an alliance with American Airlines Group Inc.
“An acquisition of Spirit by JetBlue, a high-fare carrier, would lead to more expensive travel for consumers,” Frontier said in an email, without specifying whether the company planned to increase its bid.

Crypto hater Jamie Dimon praises blockchain technology in his latest shareholder letter [Fortune]
Dimon wrote that “decentralized finance [DeFi] and blockchain are real, new technologies that can be deployed in both public and private fashion, permissioned or not….” “JPMorgan Chase is at the forefront of this innovation”; he cited the bank’s blockchain network Liink, which allows institutions to exchange payment-related information, and its JPM Coin, which JPMorgan clients can use to transfer their U.S. dollar deposits. He mentioned that JPMorgan will continue to grow and invest in its payments business.

Millennials have solved the retirement crisis [MarketWatch]
A new survey of 4,000 people by Investopedia found that more millennials own cryptocurrencies than own stocks. (Some 38% own crypto, just ahead of the 37% who own stocks.) And 28% of millennials say they are planning to rely on their cryptocurrencies to support them in retirement…. No wonder millennials are also expecting to retire early, at an average age of 61 — three years earlier than Generation X and seven years earlier than baby boomers.

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(Kabir Bakie)

Opening Bell: 6.22.20

Second wave; second phase; new stress test section; “TechFin;” private equity sours on Trump; and more!

pawson house

Opening Bell: 1.4.22

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

Opening Bell: 01.08.13

Obama Said Close to Choosing Lew for Treasury Secretary (Bloomberg) President Barack Obama may choose White House Chief of Staff Jack Lew to replace Treasury Secretary Timothy F. Geithner as soon as this week, according to two people familiar with the matter. The selection of Lew would trigger a White House shuffle for Obama’s second term as he replaces his chief of staff and moves senior aides into new roles, said the people, who requested anonymity to discuss personnel matters. While Obama hasn’t made a final decision to pick Lew, the president’s staff has been instructed to prepare for his nomination, said one of the people. Rescued by a Bailout, AIG May Sue Its Savior (NYT) The board of A.I.G. will meet on Wednesday to consider joining a $25 billion shareholder lawsuit against the government, court records show. The lawsuit does not argue that government help was not needed. It contends that the onerous nature of the rescue — the taking of what became a 92 percent stake in the company, the deal's high interest rates and the funneling of billions to the insurer's Wall Street clients — deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for "public use, without just compensation." Greenberg: 'Cadre' Hurt AIG (NYP) Maurice “Hank” Greenberg, former chief executive officer of American International Group, says in a soon-to-be-published book that the company was almost destroyed by overzealous overseers. The insurer was “ultimately taken over and run aground by a cadre of auditors, lawyers, outside directors, and government officials,” according to an excerpt of “The AIG Story” on Amazon.com’s website. JPMorgan’s Staley Quits to Join BlueMountain Hedge Fund (Bloomberg) ames E. Staley, the JPMorgan Chase executive who was once seen as a possible candidate to become chief executive officer, quit to join BlueMountain Capital Management LLC, a $12 billion hedge fund with close ties to the New York bank. Staley, who was at JPMorgan for more than 34 years, most recently as chairman of the corporate and investment bank, will become a managing partner and purchase a stake in BlueMountain, the New York-based firm said today in a statement. Proceeds from the stake sale will be invested in new infrastructure, technology and people, the firm said. “I’m very excited to be joining BlueMountain at a time when sea changes in the financial industry combined with the firm’s unique strengths open up enormous possibilities to deliver value to clients,” Staley, 56, said in the statement. HSBC N.J. Client Admits Conspiracy in Offshore Tax Case (Bloomberg) A New Jersey client of HSBC Holdings pleaded guilty to charges that he hid as much as $4.7 million through Swiss and Indian accounts not declared to the U.S. Internal Revenue Service. Sanjay Sethi, 52, who owns SanVision Technology Inc., conspired with HSBC bankers in New York, London and Geneva to hide assets from the IRS, he admitted yesterday in federal court in Newark, New Jersey. Sethi will pay a $2.37 million penalty for failing to file reports required for foreign accounts. “Sethi and his co-conspirators used nominee and shell companies formed in tax-haven jurisdictions and elsewhere to conceal the defendant’s ownership and control of assets and income from the IRS,” according to his charging document. Bill Ackman Says Just Getting Started Exposing Herbalife (Bloomberg) “We’re prepared to spend whatever it costs and do whatever is required to make sure that the world understands the facts about this company,” he said in a telephone interview. “We can’t imagine how the SEC or the Federal Trade Commission or any other relevant regulator will ignore what we have said.” Ackman said he would make all his information available to U.S. regulators. Chinese Tech Titans Eye Brazil (WSJ) The Chinese like emerging markets because, for a change, they don't have to start way behind established American companies. By moving into Brazil aggressively, Chinese PC maker Lenovo Group and Internet-search company Baidu hope to gain an edge over companies like Hewlett-Packard and Google In addition, some U.S. companies that are leaders at home and in Europe have a smaller footprint here because of Brazil's long history of protectionism and red tape and its high cost of labor, particularly compared with Asia. Oregon brewer Daniel Keeton creates nutritional, non-alcoholic brew for his dog (NYDN) Oregon man Daniel Keeton enjoys serving beer to customers at the brewery he works for, so why shouldn't he serve up some healthy brew for the dog he cares about? The dog brew is non-alcoholic of course, but it is a big hit with Keeton's canine Lola Jane. And now Keeton's special brew is available to anyone who wants it. After years of planning, Keeton launched his company Dawg Grog over the summer. Keeton, who works at Boneyard Brewery in Bend, says Dawg Grog is good for the dogs, and they can't seem to get enough of it. "Bend is a dog-loving community and a beer-loving community," Keeton told the Daily News on Monday. "I wanted to marry those two together in some way." Keeton spent years refining the ingredients to his special brew, which includes low-sodium vegetable broth, water and spent grain from Boneyard Brewery. "After a couple of years of trying recipes I came up with one that I am really happy with, and one that my dog is really happy with," he said. Secret Goldman Team Sidesteps Volcker After Blankfein Vow (Bloomberg) MSI wagers about $1 billion of the New York-based firm’s own funds on the stocks and bonds of companies, including a mortgage servicer and a cement producer, according to interviews with more than 20 people who worked for and with the group, some as recently as last year. The unit, headed by two 1999 Princeton University classmates, has no clients, the people said...The team of about a dozen people, based at the firm’s Manhattan headquarters, is headed by Daniel Oneglia and Geoff Adamson. Oneglia was treasurer of the Princeton eating club Tiger Inn, where his nicknames included “the Don” and “the Weasel,” according to the university’s website. Adamson was coxswain for men’s heavyweight varsity crew. A Boston Globe photo shows teammates flinging him into a Massachusetts lake after a victory. Carlyle Bags $4 Billion Profit From China Insurance Exit (Reuters) Private equity firm Carlyle Group sold its remaining stake in China's No.3 insurer CPIC in a deal valued at $793 million, exiting the business with its largest dollar profit on an investment. After several stake sales in the past two years, Carlyle will finish with a total profit of more than $4 billion, five times the $800 million it invested in CPIC between 2005 and 2007 for a 17 percent stake, Thomson Reuters calculations show. By private equity standards, where making two times cash paid and a few hundred million is considered a success, the CPIC exit is an historic deal for Carlyle. London Quantitative Hedge Funds Report Second Year of Losses (Bloomberg) The performance of the funds belies their popularity with investors, who’ve poured $108.2 billion into the pools since the end of 2008, according to Fairfield, Iowa-based BarclayHedge Ltd. While quants made money during the financial crisis when other hedge funds didn’t, they’ve since stumbled as market sentiment swung from optimism to pessimism following political announcements in Washington and Brussels, breaking up the trends they try to follow. That may force investors to withdraw money. Japan Executives Warn Yen May Get Too Weak (WSJ) The executives, who gathered at an annual New Year's reception held by Japan's three biggest corporate lobbies, praised Prime Minister Shinzo Abe's new government for its proposals to boost the economy and tame the strong yen, which erodes exporters' profits and makes it harder to sell Japan-made goods overseas. But they also cautioned that if the economy stays weak, or if the government doesn't take steps to get its bloated finances under control, investors could lose confidence in Japan and flee, sending the yen into free fall. KFC diner stumbles upon strange brain-like organ in his meal (TS) Disgusted Ibrahim Langoo was tucking into a Gladiator box meal when he spotted what he thought was a “wrinkled brain” inside a piece of chicken. KFC have apologised and, after having the photographs analysed, reckon the unsightly organ may in fact be a kidney. The 19-year-old took a photograph of the three-inch stomach-churning discovery on his mobile phone and complained to staff. Apologetic bosses at the fast-food chain – known for its Finger Lickin’ Good slogan – have now offered him vouchers for even more KFC meals.

Opening Bell: 03.15.12

Goldman Roiled by Op-Ed Loses $2.2 Billion for Shareholders (Bloomberg) Goldman Sachs slid $4.17 to $120.37 yesterday, leaving the shares still up 33 percent this year...Smith, who also wrote that he was quitting after 12 years at the company, blamed Blankfein, 57, and President Gary D. Cohn, 51, for a “decline in the firm’s moral fiber.” They responded in a memo to current and former employees, saying that Smith’s assertions don’t reflect the firm’s values, culture or “how the vast majority of people at Goldman Sachs think about the firm and the work it does on behalf of our clients.” You Have Less Than Two Hours To Sign Up For The Dealbreaker NCAA Tournament Challenge (DB) Do it here, do it now, or lose us forever (the password is: animalliar). SEC Cracks Down On Pre-IPO Trading (WSJ) Federal regulators are cracking down on an obscure but booming market for trading shares in companies before they go public. The Securities and Exchange Commission brought charges against two money managers, alleging they misled and overcharged investors on funds formed to buy shares of Facebook Inc., Twitter Inc. and other social-media companies. A so-called secondary market in these companies' private shares has grown rapidly as more investors seek to buy into the companies before their initial public offerings, hoping to profit later from a "pop" in the stock price after the IPO. The allegations by the SEC mark the first major regulatory blow to the market, which the agency says emerged in 2009 and which industry participants say has been fueled lately on the anticipation of a Facebook IPO in the coming months. Citi Rejection Stings Pandit (WSJ) The board of directors held a meeting by telephone shortly after the Federal Reserve said Tuesday it had turned down the capital plan the New York company submitted as part of its latest "stress test," according to people familiar with the situation. Neither Citigroup nor the Fed disclosed what the bank had been seeking, but in recent months the bank's executives had repeatedly said they wanted to return capital to shareholders through dividends or share buybacks in 2012. "Everyone was taken by surprise," said a person with knowledge of the reaction among Citigroup executives and board members. Jobless Claims in U.S. Decrease, Matching Four-Year Low (Bloomberg) Claims for jobless benefits dropped last week in the U.S., matching the lowest level in four years, more evidence the labor market is improving. Applications for unemployment insurance payments fell by 14,000 to 351,000 in the week ended March 10, Labor Department figures showed today. Economists forecast 357,000, according to the median estimate in a Bloomberg News survey. Claims reached the same level a month ago, the lowest since March 2008. UBS Cuts Bonus Pool (WSJ, DB) That would be putting it mildly. JPMorgan's Dimon Responds to Goldman Column (Reuters) J.P. Morgan CEO Jamie Dimon told employees to resist taking advantage of competitors and to focus instead on strengthening the bank's own standards, in an internal memo sent in response to the firestorm engulfing Goldman Sachs after a former banker published his resignation letter in the New York Times. Meredith Whitney: Banks Oversold, Muni Defaults Still Coming (CNBC) "The banks should trade at tangible (book value) or a little better," she said. "But that doesn't mean they're off to the races and that there's tremendous momentum behind the fundamentals of these banks." Goldman fights back after employee's scathing public exit (NYP) After the memo was distributed, Goldman brass went into damage-control mode, fielding calls from investors and clients searching for reaction from the 143-year-old firm. Blankfein was light-hearted about the surprise attack but tried to be extremely responsive to client inquiries about it, sources said. Privately, some Goldman officials played down Smith’s significance within the firm, describing him as a “disgruntled mid-level employee.” Two Billionaires Side With Greg Smith Against Goldman (Forbes) Jim Clark said Smith’s criticism of Goldman’s treatment of its customers is “what I experienced over the four to five years” he entrusted some of his funds with the firm’s private wealth management division...Billionaire Stephen Jarislowsky, CEO of Canadian investment firm Jarislowsky, Fraser, says he also supports Smith’s op-ed. “It’s about ethics and fiduciary responsibility, and the lack thereof,” explains Jarislowsky. “If you’re a fiduciary you should work for your client and not for anyone else. If you’re a doctor, you’re not supposed to work for your pocketbook, but for your client’s health.” Chinese Economy Already in ‘Hard Landing,’ JPMorgan’s Mowat Says (Bloomberg) China’s economy is already in a so- called “hard landing,” according to Adrian Mowat, JPMorgan Chase & Co.’s chief Asian and emerging-market strategist. “If you look at the Chinese data, you should stop debating about a hard landing,” Mowat, who is based in Hong Kong, said at a conference in Singapore yesterday. “China is in a hard landing. Car sales are down, cement production is down, steel production is down, construction stocks are down. It’s not a debate anymore, it’s a fact.” Arrest warrant issued for Russell Brand over iPhone rage (NYP) Brand was named in a police report on Monday night after allegedly grabbing a photographer's cell phone out of his hand and hurling it through the window of a law firm. The paparazzo, Timothy Jackson, filed a police report immediately after the incident, citing "criminal damages." According to Jackson, he had been out with several fellow photographers when he started taking pictures of the 36-year-old British comedian and actor with his iPhone. Brand allegedly "flipped out," snatched the cell phone and threw it at a building, breaking a window in the process. His reps have contacted the law firm and offered to pay for the broken window.

kengriffin

Opening Bell: 5.6.20

COVID-19 is basically a Nazi; Ken Griffin the hero; private equity needs better lobbyists; can we leave Tom Cruise in space; and more!

Opening Bell: 9.29.15

Commodities crisis; Trump hearts hedge funds; Private equity snapping up troubled home mortgages; China's national judicial examination asks lawyers, "Who do you save in fire, mom or girlfriend?"; and more.

Opening Bell: 02.28.13

EU Bonus Rules Meet Anger (WSJ) The new rules would prevent banks from promising bonuses that exceed an employee's salary—though, with shareholder approval, bonus payments could rise to double the salary. The rules, which are supposed to kick in at the beginning of next year and appear to be the world's toughest, still need to be approved by EU member states and the full European Parliament. European banking executives and trade groups say the rules—which are likely to apply to all European bank's employees around the world—will put the industry at a severe disadvantage relative to U.S. and Asian banks, and that it will provoke unintended consequences. Banks early Thursday weren't yet publicly commenting as they digested the news. But executives privately didn't hold back. "It's a disaster," said a senior investment-banking executive at a top European bank. "It's a crazy policy" that could jeopardize European banks' abilities to hire employees in the U.S. or Asia. Jockeying Stalls Deal On Spending Cuts (WSJ) With mandatory across-the-board spending cuts set to begin Friday, the White House and congressional Republicans are poised to let the deadline pass, each calculating that their hand in negotiations only grows stronger if they scorn a quick compromise. The first face-to-face meeting on the issue between President Barack Obama and congressional leaders won't happen until Friday—the deadline for Mr. Obama to set in motion $85 billion in broad spending cuts. None of the participants expect the morning meeting at the White House to produce a breakthrough. In the run-up, with no serious talks under way, each side is maneuvering to ensure the other catches the blame if the cuts kick in. Cuts Unlike To Deliver Promised US Budget Savings (Reuters) The $85 billion cut to budget authority amounts to about 2.4 percent of the $3.6 trillion the U.S. government is expected to spend in the fiscal year that ends on Sept. 30. The actual amount of savings is much less - $43 billion in the current fiscal year, according to the Congressional Budget Office. That's because federal agencies don't spend all of the money they are allocated in any given fiscal year. A $1 billion aircraft carrier, for example, may take years to build. Even at that lower level, the effects are likely to ripple across the world's largest economy in a way that will work against deficit-reduction efforts. Scrutiny Of Heinz Trades Grows (WSJ) The Financial Industry Regulatory Authority, a Wall Street self-regulator, and the Federal Bureau of Investigation are reviewing numerous trades in Heinz stock shortly before the buyout announcement sent the share price soaring Feb. 14, the people said. The inquiries add to an investigation the Securities and Exchange Commission disclosed Feb. 15 into what it called a "highly suspicious" $90,000 purchase of stock options the day before the deal, a position with a potential profit of $1.7 million. The FBI also has said it launched a criminal investigation into options activity ahead of the deal. Flowers Foods Set To Buy Wonderbread From Hostess (NYP) After no other bidders emerged to challenge it, Flowers Foods is set to snare Wonder and a slew of other bread brands being sold by bankrupt Hostess Brands for $360 million. How The Pope's Retirement Package Compares To Yours (CNBC) Let's start with the basics: The pope emeritus will receive a monthly pension of 2,500 euros, according to Italian newspaper La Stampa. That translates to almost $3,300, or close to the monthly maximum of $3,350 that Social Security will pay to an American who retires this year. Few people will actually qualify for that amount. For starters, you would have to wait until 70 to retire. You would also have to spend most of your working life earning Social Security's taxable maximum pay, which is set at $113,700 this year. "That's quite rare," said Richard Johnson, director of the program on retirement policy at the Urban Institute. He pointed out that the average Social Security check is about $1,200 a month — not enough to pay for the typical American retiree's expenses. "For most people, if you look at the median, Social Security counts for about 40 percent of their income. So it's important, but people rely a lot on other savings, like pensions or 401(k) savings," Johnson said. A big nest egg is not something the pope emeritus has to worry about. The Roman Catholic Church will cover his living expenses, provide him with a spacious home inside the Vatican and pay for everything from cooked meals to housekeepers, according to The Telegraph. Such services are not available to the typical American senior, unless he or she pays for an assisted living facility or resides in a nursing home, Johnson said...Health care costs are one of the big risks that older Americans face, and while Medicare pays for the bulk of their expenses, many things are left uncovered, Johnson said. Meanwhile, the pope emeritus will continue to be a member of the Vatican's generous private health care policy, the BBC reported. Blackstone Profits From Regulation With Citigroup Deal (Bloomberg) Blackstone has devised a way to profit from regulation: It’s helping banks meet tougher capital rules without the pain of selling assets or raising equity. The firm last year insured Citigroup against any initial losses on a $1.2 billion pool of shipping loans, said two people with knowledge of the transaction, who asked not to be identified because the matter is private. The regulatory capital trade, Blackstone’s first, will let Citigroup cut how much it setsaside to cover defaults by as much as 96 percent, while keeping the loans on its balance sheet, the people said. RBS Moves To Appease UK (WSJ) The 81%-state-owned bank unveiled a series of moves to ease government and regulatory pressure on the bank to become more U.K. focused and better capitalized. Chief Executive Stephen Hester confirmed that it would list around 25% of the U.S.-based RBS Citizens bank in the next two years "to highlight the valuable nature of the business." RBS also said it would further pare back its investment bank, shedding jobs and cutting risk-weighted assets to £80 billion ($121.3 billion), from £101.3 billion at the end of 2012. Unemployment aid claims fall by 22,000 last week (AP) The number of Americans seeking unemployment aid fell 22,000 last week to a seasonally adjusted 344,000, evidence that the job market may be picking up. The four-week average of applications dropped 6,750 to 355,000, the Labor Department said Thursday. That was the first drop in three weeks. Too Big To Fail Hurting Too Small To Compete Banks (Bloomberg) Investors such as Joshua Siegel, founder and managing principal at New York-based StoneCastle Partners LLC, see bigger changes at the other end of the spectrum. Small banks will seek mergers because their management teams are aging and new regulations are too costly to bear, he says. “If you need one major overriding theme of the industry in the next three, five, seven, 10 years: massive consolidation, thousands of banks,” says Siegel, whose firm managed $5.1 billion as of the end of last year and invests in small banks. In the U.S., “I do see probably anywhere from 2,000 to 4,000 banks being swallowed up, and what you’ll see then is a more- concentrated system.” Dennis Rodman Tells Kim Jong Un: You Have A Friend For Life (NYP) Rodman and Kim sat side by side at an exhibition game in Pyongyang on Thursday, chatting as they watched players from North Korea and the US play in mixed teams, Alex Detrick, a spokesman for the New York-based VICE media company, told The Associated Press. Rodman later addressed Kim before a crowd of thousands, telling him, "You have a friend for life," Detrick said. The encounter makes Rodman the most high-profile American to meet with the young North Korean leader, said to be a diehard basketball fan.

jack dorsey

Opening Bell: 11.29.21

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