Opening Bell: 07.26.13

Opening Bell: 07.26.13

Senate letter backs Yellen for Fed role (FT)
A number of US Senate Democrats are circulating a letter supporting Janet Yellen to be the next chair of the Federal Reserve in an ominous sign for supporters of Larry Summers. Ms Yellen, vice-chair of the Fed board, and Mr Summers, a former Treasury secretary and White House economic adviser, are the two leading candidates to replace Ben Bernanke. The letter has been pushed by Sherrod Brown from Ohio, Senate officials said, one of the chamber’s leading liberals and a longtime critic of financial deregulation and trade liberalisation. Signatories include Tom Harkin of Iowa, and Dianne Feinstein of California.

Up for Debate at Fed: A Sharper Easy-Money Message (WSJ)
The Federal Reserve is on track to keep its $ 85 billion-a-month bond-buying program in place at its policy meeting next week, but officials will debate changes to the way the central bank describes its plans for the program and for short-term interest rates. Fed Chairman Ben Bernanke has been saying since May that the central bank expects to begin winding down its bond-buying program later this year, if the economy strengthens as the Fed forecasts. At their July 30-31 meeting, Fed officials are likely to discuss whether to refine or revise “forward guidance,” the words they use to describe their intentions for the next few years.

Banks shiver as UBS swallows $ 885 million U.S. fine (Reuters)
UBS is just one of 18 banks the FHFA pursued in 2011 for allegedly misrepresenting the quality of the collateral backing securities during the run-up to the financial crisis. The regulator is seeking to recover losses on mortgage bonds sold to Fannie Mae and Freddie Mac. UBS is the third to settle, after Citigroup and General Electric settled for undisclosed sums.

Wall Street’s Exposure to Hacking Laid Bare (DealBook)
In a separate indictment unsealed in federal court in New York, one of the men, Aleksandr Kalinin of Russia, was charged with having gained access for two years to the servers of the Nasdaq stock exchange. While Mr. Kalinin never penetrated the main servers supporting Nasdaq’s trading operations — and appears to have caused limited damage at Nasdaq — the attack raised the prospect that hackers could be getting closer to the infrastructure that supports billions of dollars of trades each hour.

Being rude to French president no longer an offense (Reuters)
Being rude to the French president is no longer an offense after parliament agreed on Thursday to amend legislation dating back to 1881 in favour of freedom of speech. … The change came after the European Court of Human Rights ruled in March that France violated a demonstrator’s right to freedom of expression when it fined him for holding a banner up to former President Nicolas Sarkozy reading: “Get lost, jerk.”

Activision in $ 8.2 Billion Deal to Buy Back Stake From Vivendi (DealBook)
Activision Blizzard, the world’s biggest video game publisher, has a reached an $ 8.2 billion deal to separate from Vivendi and become an independent company. Under a deal that was announced early Friday, Activision Blizzard and a group of investors led by the company’s management will buy back shares owned by Vivendi, the French conglomerate that controls the video game maker, leaving a majority of Activision Blizzard’s shares held by the investing public. Activision Blizzard will buy about 429 million of its shares and certain tax attributes from Vivendi for roughly $ 5.83 billion in cash, or $ 13.60 a share, the company said. In addition, Robert A. Kotick, 50, the chief executive, and Brian Kelly, the co-chairman, are leading a group in buying about 172 million shares of the company from Vivendi for about $ 2.34 billion.

Amazon Posts Surprise Loss After Spending on Warehouses (Bloomberg) Inc. reported a surprise net loss as the world’s largest online retailer continued to pump money into warehouses and digital content, fueling sales growth at the expense of profits. The second-quarter net loss was $ 7 million, or 2 cents a share, compared with profit of $ 7 million, or 1 cent, a year earlier, the Seattle-based company said in a statement yesterday. Analysts had projected net income of $ 28.8 million on average, or 6 cents, according to data compiled by Bloomberg.

Goldman CEO on risk: The worst ‘absolutely will happen’ (CNBC)
“Most risk management is really just advanced contingency planning and disciplining yourself to realize that, given enough time, very low probability events not only can happen, but they absolutely will happen,” said Blankfein. “The definition of infinity is that you wait long enough, everything happens.” … “Once you think that something is improbable and everybody thinks it, people modify their behavior in a way that makes it more probable,” said Blankfein.

Detroit set to beat bad-faith charge over bankruptcy (Reuters)
Meetings without the chance for any back and forth, unreturned phone calls and brusque tactics. To opponents of Detroit’s bankruptcy filing, Emergency Manager Kevyn Orr has utterly failed to negotiate with them. But retired city workers, who are fighting to stop their pensions from being cut, and hope to stop Detroit’s bankruptcy by claiming in court that Orr didn’t engage in good-faith negotiations, are likely out of luck.

Halliburton to Plead Guilty to Destroying Deepwater Horizon Evidence (WSJ)
Halliburton Co. will plead guilty to destroying evidence in the wake of the April 2010 Deepwater Horizon disaster. The government said Thursday that the company, a contractor involved in drilling the oil well that exploded in the Gulf of Mexico, destroyed computer simulations it performed in the months after the accident. Those simulations didn’t bear out Halliburton’s contention that BP PLC, which owned the well, erred by not following its advice on using certain equipment, the Justice Department said. … In addition to pleading guilty to one count of destruction of evidence and paying a $ 200,000 fine, Halliburton will donate $ 55 million to the National Fish and Wildlife Foundation, the government said.

Fed-up Silda Spitzer plans to divorce Eliot after election (NYP)
Silda Spitzer is privately telling friends she plans to divorce her hooker-loving husband, Eliot Spitzer, Page Six can exclusively reveal. Multiple sources tell us long-suffering Silda — who, he last night admitted, will not be joining him on the campaign trail — “has had enough” and plans to start divorce proceedings after his run for New York City comptroller is over.

Murderer put killing wife on to-do list (UPI)
Jean Pierre Tiras stabbed his wife to death in winter 2012. But it was just part of his checklist. Trias’ wife, Katherine Porter, was found dead after the stabbing. Her sisters Martha Porter and Sarah Porter filed a lawsuit that said the murder was premeditated. “Kill Kathie Kill Kathie Kill Kathie!!!!!” was written on a list of household chores in a computer file recovered by police.

Prince Harry wants to make sure Prince George “has fun” (CBS)
“It’s fantastic to have an addition to the family,” he added, joking, “I only hope my brother knows how expensive my babysitting charges are!”



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