BNP Paribas Q3 Profit Falls 72% on Writedown

BNP Paribas SA, France’s largest bank, said third-quarter profit fell 72 percent because of a writedown on Greek sovereign debt and losses from selling European government bonds.

Net income declined to 541 million euros ($741 million) from 1.91 billion euros a year earlier, the Paris-based company said in an e-mailed statement today. That missed the 1.24 billion-euro average estimate of 13 analysts surveyed by Bloomberg. The bank took a 2.26 billion-euro pretax writedown on Greek sovereign debt in the period.

“The new plan of Greek debt restructuring weighed on the results,” Chief Executive Officer Baudouin Prot said in the statement. Still, the company “is profitable and is keeping its solvency ratio at a high level,” he said.

BNP Paribas (BNP) said today it expects about 1.2 billion euros in losses from disposals and one-time costs as it speeds up asset cuts to comply with new capital rules. The bank, along with smaller French rival Societe Generale SA, is racing to shrink its balance sheet after the firm’s stock plunged and U.S. money-market funds became reluctant to lend to it in dollars, making it harder to refinance international businesses.

Obama Campaign Replaces Wall Street Defectors to Help Funding

The high technology Internet industry and trial lawyers are helping President Barack Obama avoid a potential fundraising liability caused in part by a drop in support from his biggest 2008 industry backer: Wall Street.

Microsoft Corp. (MSFT) employees rank first among Obama’s business givers, taking the spot investors at Goldman Sachs Group Inc. (GS) held in the 2008 presidential cycle, according to the Center for Responsive Politics, a Washington-based research group.

Goldman on Way to Top Nomura as No. 1 Japan Takeover Adviser

The New York-based firm was hired for $54.1 billion of acquisitions announced this year involving Japanese companies, surpassing Nomura’s $47.1 billion,

Goldman Sachs Group Inc. (GS) is on its way to taking the top spot among advisers on Japanese takeovers for the first time in five years, supplanting Nomura Holdings Inc. (8604), as companies striving to compete globally turn increasingly to foreign investment banks.

The New York-based firm was hired for $54.1 billion of acquisitions announced this year involving Japanese companies, surpassing Nomura’s $47.2 billion, according to data compiled by Bloomberg. In 2010, Nomura held the top spot with $47.6 billion in deals, while JPMorgan Chase & Co. (JPM) was second with $27 billion and Goldman Sachs at No. 7 with about $10 billion.

State Revenue Under Forecasts to Produce Cuts From New York to California

New York, California and Florida are among states reporting revenue collections trailing forecasts in the fiscal first quarter, prompting preparations for a fresh round of budget reductions.

California’s receipts fell more than 3 percent short of estimates for the three months through September, raising concern that school aid may be cut. In fiscal 2013, New York state may face a $2.4 billion deficit because of smaller Wall Street bonuses and job cuts, Comptroller Thomas DiNapoli said Oct. 11.

States are projecting combined budget gaps of $31.9 billion in fiscal 2013, according to the National Conference of State Legislatures in Denver. A 14 percent third-quarter drop in the Standard & Poor’s 500 Index, the worst performance since the end of 2008, and concern that Europe’s debt crisis may spread have dented consumer and business confidence, curbing tax receipts.

“It’s going to be quite a while before happy days are here again for many state legislatures,” John J. Pitney Jr., a politics professor at Claremont McKenna College in Claremont, California, said by telephone. “There is such weak job growth and income growth. Everything that should be up is down.”

Russia Stocks Rise 3rd Day This Week on EU Bailout; Kalina Jumps

Russian stocks climbed for the third day this week as prospects improved for containing Europe’s debt crisis. OAO Concern Kalina, a Russian cosmetics maker, jumped to its highest on record.

OAO Sberbank, Russia’s biggest lender, gained 1.5 percent, while OAO Novolipetsk Steel added 1.2 percent. Kalina surged 40 percent to the strongest price since its shares started trading in 2004 after the Wall Street Journal said Unilever NV is close to acquiring the company in a deal worth $850 million. The 30- stock Micex Index added 0.7 percent to 1,398.25 as of 10:39 a.m. in Moscow.

Cain’s Sales Tax Would Hurt Consumer Spending ’For Some Years’

Rachelle Bernstein, vice president of the National Retail Federation, speaks during a Bloomberg Television Interview in Washington, D.C.

Republican presidential candidate Herman Cain’s plan to create a national sales tax would hurt retailers, threaten economic growth and shift the tax burden onto the middle class and poor, tax experts and business groups said.

Cain’s so-called 9-9-9 plan, which would replace the current tax code with a system of three separate taxes of 9 percent each, has boosted his popularity among voters. The former chief executive officer of Godfather’s Pizza has surged in polls in recent weeks, and a Wall Street Journal/NBC News poll released this week put him in the lead.

Rajaratnam, Goldman Sachs, Brocade, Amaranth in Court News

Raj Rajaratnam, the Galleon Group LLC co-founder whom prosecutors called “the modern face of illegal insider trading,” was sentenced to 11 years in prison, one of the longest terms ever for insider trading, though less than half of the maximum sought by the government.

Rajaratnam, 54, is the central figure in what U.S. investigators called the largest hedge fund insider trading case in U.S. history. The probe, which leveraged the widespread use of FBI wiretaps for the first time in such an inquiry, led to convictions of more than two dozen people.

Wall Street Protests Planned in Asia-Pacific

The Occupy Wall Street rallies started last month in New York’s financial district.

Protests against widening income disparity are planned across the Asia-Pacific region tomorrow as demonstrators organizing via social media from Tokyo to Sydney join London in the Occupy Wall Street movement.

Wall Street Demonstrators Vow to Defend ‘Occupation’ as Cleaners Sweep In

Wall Street protesters vowed to “defend the occupation” of Zuccotti Park in Lower Manhattan after police said they’ll have to clear out sleeping bags and other belongings under rules set by the private park’s owner.

Brookfield Office Properties Inc., a New York-based real- estate developer that owns the property, said crews will close sections of the park for cleaning beginning at 7 a.m. today to relieve “unsanitary conditions.”

Yuan Retreats From 17-Year High on Importers’ Demand for Dollar

China’s yuan retreated from a 17- year high on speculation importers boosted dollar buying to take advantage of the local currency’s recent gains.

Companies due to make overseas payments probably stepped up purchases of the greenback after the yuan gained 1.2 percent last quarter, the best performance among Asia’s 10 most-traded currencies. A stronger local currency reduces the cost of imports. China’s financial markets were shut during the first week of this month for the National Day holidays. The yuan also dropped today as the nation’s shares pared an advance.

High Frequency Trades, Volcker Draft, French Audits: Compliance

Mary Schapiro, the chairwoman of the U.S. Securities and Exchange Commission, and regulators from the U.S., Europe and Asia will meet in London to discuss high- frequency trading, said two people with knowledge of the discussions.

The summit at the U.K. Financial Services Authority on Oct. 14 will also include Gary Gensler, chairman of the Commodities and Futures Trading Commission, and Steven Maijoor, chairman of the European Securities and Markets Authority, according to the people, who declined to comment because the meetings are private. Officials from Japan, Brazil, Italy, Spain and Canada will also attend the meetings, which will look at regulatory issues other than high-frequency trading.

Perry, Cain, Romney to Vie for Lead in Debate

Herman Cain’s newly energized candidacy is reshaping the Republican presidential primary race and creating a new hurdle for Texas Governor Rick Perry as he tries to catch frontrunner Mitt Romney.

Those dynamics will be on display tonight in a debate focused exclusively on the economy and jobs and to be held in New Hampshire, the first presidential primary election state.

A pre-debate poll of Republicans and Republican-leaning independent by Bloomberg News and the Washington Post, the debate sponsors, found that Cain, the former Godfather’s Pizza chief executive, has pulled almost even with former Massachusetts Governor Romney in appeal as an economic leader.

Retail Sales Likely Rose in September

U.S. retail sales increased in September at the fastest pace in six months, providing a sign of optimism for some merchants heading into the holiday shopping season, economists said before a report this week.

The projected 0.7 percent gain would follow no change in the previous month, according to the median of 69 forecasts in a Bloomberg News survey ahead of Commerce Department​ figures on Oct. 14. The trade gap widened in August, other data may show.

Romney Calls for Civility, Unity Among Religions at Republican Conference

U.S. Republican presidential hopeful former Massachusetts governor Mitt Romney addresses the Family Research Council's Values Voter Summit in Washington on October 8, 2011.

Republican presidential candidate Mitt Romney, who was labeled a cult member last week, said religious differences shouldn’t divide Republicans and urged civility in party’s 2012 presidential nomination process.

Wall Street Protesters Are Angry About Jobs, Pelosi Says

“Occupy Wall Street” protesters are angry over the lack of employment prospects and government actions that are “not relevant to their lives,” House Minority Leader Nancy Pelosi said.

“I think they are angry that they don’t have jobs,” Pelosi told ABC News’ “This Week” program. “There’s nothing that makes you angrier than not being able to provide for your family or understand what your prospects are for the future.”

Cohan: Occupy Wall Street Needs Goals, Or Funnel Cake

William D Cohan.

Late last week, I went to the southern tip of Manhattan to see what all the fuss is about, but discovered that the only people occupying Wall Street these days are a bunch of tourists and the few remaining bankers who actually work there.

There wasn’t a protester in sight, in large part because three weeks into the Occupy Wall Street movement, the New York City police no longer allow anyone remotely interested in complaining about banker greed, income inequality or other perceived systemic injustices anywhere near the symbolic center of capitalism. The police have connected the steel barricades that line much of Wall and Broad streets near the New York Stock Exchange, and strategically placed late-model SUVs at intimidating angles in the roadways. Since the Sept. 11 attacks, cars have been banned from most of Wall and Broad. Now dissenters have been, too.

If you want to take the pulse of Occupy Wall Street, you have to head a couple of blocks north to Zuccotti Park, a 33,000-square-foot, rather unlovely, pink-granite-covered zone named for John Zuccotti, a former chairman of the city’s planning commission and the co-chairman of Brookfield Office Properties Inc., one of nation’s largest real-estate developers. Brookfield owns the World Financial Center complex across from ground zero and was runner-up to Larry Silverstein for the right to own the 99-year lease on the World Trade Center.

Republican Candidates Dismiss Criticism of Romney as Mormon ‘Cult’ Member

Republican presidential candidates, from left, former House Speaker Newt Gingrich, Rep. Ron Paul, Texas Governor Rick Perry, former Massachusetts Governor Mitt Romney, and Rep. Michele Bachmann participate in the Fox News/Google GOP Debate in Orlando, Florida, on Sept. 22, 2011.

Republican presidential candidates dismissed a Baptist minister’s criticism of their party frontrunner Mitt Romney’s Mormon faith, saying his religion shouldn’t be a campaign issue.

“This is so inconsequential as far as this campaign is concerned,” Representative Michele Bachmann, of Minnesota, said on CNN’s “State of the Union” program. “To make a big issue out of this is ridiculous.”

Cain’s Campaign Soars as Republicans Search for Someone to Love

Herman Cain, a one-time pizza magnate and sunny-skies orator, is entering a new phase of scrutiny after a wave of Republican Party dissatisfaction with its presidential choices has thrust him into the upper tier of candidates.

Cain, 65, whose come-from-way-behind campaign has been conducted largely via television, presents himself as destined for victory: His new memoir is called “This is Herman Cain! My Journey to the White House.” Now, in the run-up to tomorrow’s Republican debate in New Hampshire, Cain is being pressed on his so-called 9-9-9 tax plan -- a flat 9 percent rate on corporate and personal income and a national sales tax -- his criticism of the Occupy Wall Street protesters and his lack of experience in public office.

“Get ready for an aberration of historic proportion,” Cain said in an interview yesterday during “State of the Union” on CNN. “People who are criticizing me because I have not held public office, they are out of touch with the voters out there.”

Taxing Millionaires Casts Obama’s Democrats as Class ‘Warriors’

Democrats have turned to an agenda that Republicans are calling class warfare, as President Barack Obama presses a “Buffett Rule” to tax the rich, Senate Democrats offer a millionaires’ tax instead and party leaders fulminate against Bank of America’s $5 debit-card service fee.

Campaigning for re-election, Obama welcomes the charge.

“Then guess what? I’m a warrior for the middle class,” he declared Sept. 22, standing at a Cincinnati bridge linking the home states of the Republican leaders of the House and Senate and setting a new course for his own party.

Steve Jobs, Who Built World’s Most Valuable Technology Company, Dies at 56

Steve Jobs, who built the world’s most valuable technology company by creating devices that changed how people use electronics and revolutionized the computer, music and mobile-phone industries, died. He was 56.

Jobs, who resigned as Apple Inc. chief executive officer on Aug. 24, 2011, passed away yesterday, the Cupertino, California- based company said. He was diagnosed in 2003 with a neuroendocrine tumor, a rare form of pancreatic cancer, and had a liver transplant in 2009.

Anti-Wall Street Protests Ignore Legitimate Gripe: Caroline Baum

From the looks of the youthful, costumed characters swaying to the music and flying colorful balloons, it was hard to tell if Occupy Wall Street was a street fair, a ‘60s-style love-in or a protest rally.

Arrested Wall Street Protesters Seek Talks With City Over Police Tactics

A lawyer for anti-Wall Street protesters arrested in a march across New York’s Brooklyn Bridge said her clients hope to talk with city representatives to resolve what she called a “pattern and practice of police misconduct.”

Five protesters sued the city, Mayor Michael Bloomberg and Police Commissioner Raymond Kelly Oct. 4 for allegedly violating their civil rights in the Oct. 1 arrests. The protesters, who seek to sue on behalf of about 700 people arrested in the march, claimed police lured them onto the bridge’s roadway to trap and arrest them.

In a hearing before U.S. District Judge Jed Rakoff in Manhattan today, attorney Mara Verheyden-Hilliard said the protesters may ask for a court order to force the New York City Police Department to change its tactics if they can’t reach agreement with the city.

The protesters, whose demonstration continued today in Lower Manhattan, are seeking a declaration nullifying the arrests and saying that the police violated the U.S. Constitution. They want Rakoff to bar the city from using similar tactics in the future. The group is seeking unspecified compensatory and punitive damages.

Rakoff said he expects the case to be tried by June. He set Dec. 7 for arguments on an anticipated request by the city to have the case dismissed.

Kate O’Brien Ahlers, a spokeswoman for the city’s Law Department, had no immediate comment on the suit.

The mayor is founder and majority owner of Bloomberg LP, parent of Bloomberg News.

Police have said protesters were warned not to block the roadway and that those at the rear were allowed to leave. 

SOURCE

Anti-Wall Street Protests Grow in New York as Other Cities Join

Demonstrators from New York City to San Francisco took to the streets to protest what they call a growing wealth disparity between large U.S. corporations and average citizens in the wake of the financial crisis.

Picketers marched yesterday as part of the Occupy Wall Street movement that began three weeks ago in Lower Manhattan and has spread across the U.S. The New York crowd was estimated at 10,000, according to Patrick Bruner, a spokesman for the effort.

“There’s power in numbers, and we outnumber the people we’re trying to hold accountable,” said Henry Liedtka, a 27- year-old pharmacy worker from New Jersey who said he’s protested since Oct. 2. “We should be bailing out the American public -- not corporations -- by raising the minimum wage, bringing jobs back from overseas and improving labor conditions.”

Paterno’s Way Turned Penn State Champs Into Wall Street Bankers

The path from football to Wall Street is well-worn. Now the championship-winning 1986 team at Penn State University is retracing its steps.

Playing for Joe Paterno, the 84-year-old Brooklynite who’s in his 46th season as head football coach, is tougher than Wall Street, said John Shaffer, head of junk-bond sales at Goldman Sachs Group Inc. (GS), who will join Paterno and other former teammates-turned-bankers this weekend to mark the 25th anniversary of the school’s most recent national football title.

“That pressure, that competition I tried to replicate on Wall Street, but I just couldn’t,” said Shaffer, 47, the team’s starting quarterback.

Others planning to attend a ceremony at Beaver Stadium in State College, Pennsylvania, on Oct. 8 at halftime of the University of Iowa game are Matthew Johnson, 46, head of global equity syndicate at Barclays Plc (BARC) and a former nose tackle at Penn State, and Lance Lonergan, 44, co-chief executive officer at Weeden & Co., a backup quarterback in 1986.

Paterno, whose 405 wins are the most among major-college football coaches, taught more than the game, the former players said. They have applied the traits and principles they learned at Penn State, such as teamwork, coping with failure and leaving the game on the field, they said.

BofA, Oracle, Blavatnik, Morgan Stanley, AT&T, Wells Fargo in Court News

Bank of America Corp. (BAC)’s Countrywide unit was sued by Sealink Funding Ltd. in New York over $1.6 billion of residential mortgage-backed securities the fund purchased between 2005 and 2007.

Sealink filed the suit against Countrywide in New York State Supreme Court Sept. 29, seeking unspecified compensatory, rescissory and punitive damages. Sealink is a fund created to manage Landesbank Sachsen AG’s riskiest assets after the German lender almost collapsed.

“Countrywide was an entity driven by only one purpose --to originate and securitize as many mortgage loans as possible into” mortgage-backed securities “to generate profits for the Countrywide defendants, without regard to the investors that relied on the critical, false information provided to them with respect to the related certificates,” lawyers for Sealink said in the lawsuit.

Sealink filed a similar suit Sept. 29 in the same court against JPMorgan Chase & Co. (JPM) over $2.4 billion worth of residential mortgage-backed securities purchased between 2005 and 2007.

Dan Frahm, a spokesman for Charlotte, North Carolina-based Bank of America, didn’t immediately return a voice-mail message seeking comment on the lawsuit. Jennifer Zuccarelli, a spokeswoman for New York-based JPMorgan, declined to comment.

Falling Wages Threatening U.S. as Consumers May Reduce Spending

Ninety-one percent of people in the U.S. labor force have a job. That may be the extent of the good news for these Americans, whose incomes tell a darker story.

Take-home pay, adjusted for prices, fell 0.3 percent in August, the third decrease in five months, and personal income dropped for the first time in two years, the Commerce Department reported last week. The declines followed news from the Census Bureau that median household income in 2010 fell to $49,445, the lowest in more than a decade, and the poverty rate jumped to 15.1 percent, a 17-year high.

Salary and benefit growth “has been going nowhere,” said Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “One of the key reasons the recovery has stalled is that real incomes have fallen.”

Christie Would ‘Cannonball’ Republican Field, Face Challenges

New Jersey Governor Chris Christie -- on the brink of deciding whether to run for president as Republicans shower him with entreaties to do so -- could catapult to the front of an unsettled party field, strategists say, even as he would face a difficult road to nomination.

For Republicans yearning for a truth-telling figure and fresh face, Christie, 49 -- brash and plainspoken, with a reputation for slashing government spending and taking on labor unions -- would appear to be an ideal candidate.

Gold Climbs as European Crisis Spurs Demand

Gold advanced for a third day on concern that Europe’s sovereign-debt crisis may not be contained, spurring investors to buy the metal to guard their wealth against a potential slowdown in the global economy.

Immediate-delivery gold climbed as much as 1.4 percent to $1,647.35 an ounce, and traded at $1,646.98 at 2:50 p.m. in Singapore. The precious metal, which reached an all-time high of $1,921.15 on Sept. 6, climbed 8.2 percent in the three months to Sept. 30 for a 12th quarterly advance. December-delivery bullion gained as much as 1.7 percent to $1,650 an ounce in New York.

European finance chiefs meet in Luxembourg today to discuss how to protect banks from the fallout of a potential Greek default even as the country approved further austerity measures needed to secure an aid payment and second rescue package.

Sony Tumbles to 24-Year Low on Outlook, Yen

Sony Corp. (6758), Japan’s biggest exporter of consumer electronics, fell to its lowest level in 24 years in Tokyo trading on speculation the yen's strength and slumping demand for television will hurt earnings.

The stock dropped as much as 6.2 percent to 1,413 yen, the lowest intraday level since June 10, 1987, according to data compiled by Bloomberg. They changed hands at 1,418 yen at 1:17 p.m. The shares have dropped 52 percent this year.

Ex-Morgan Stanley MUFG Strategist Kinmont to Start Hedge Fund

Alexander Kinmont, the equity strategist who wrote “The Irrelevance of Japan” report in 2002, is planning to start a hedge fund focused on the country after leaving Morgan Stanley MUFG Securities Co. in July.

Kinmont, formerly a managing director of Japan equity strategy at Morgan Stanley MUFG in Tokyo, is heading Tokyo-based Milestone Asset Management Co., he said. The company currently offers a long-only fund and is planning to start a long-short hedge fund later this month to profit from rising and falling stock prices, he said, declining to elaborate further because it is still being planned.

SEC’s Former Top Lawyer Says He Had No Conflict in Madoff Case

Former U.S. Securities and Exchange Commission general counsel David Becker said he didn’t violate the law when he worked on agency policy about the Bernard Madoff case after inheriting money from the Ponzi scheme.

Becker, who stepped down in February, made the statement in remarks prepared for a U.S. House hearing today. He is testifying along with SEC Chairman Mary Schapiro and H. David Kotz, the inspector general who earlier this week released a 119-page report calling for Becker’s conduct to be reviewed by federal prosecutors.

‘Massive’ ETF Insider Trading, Google Ad Rates, UBS Board: Compliance

A former Goldman Sachs Group Inc. (GS) trader and his father were accused by U.S. regulators of making illegal trades based on confidential information related to the Wall Street firm’s exchange-traded fund investments.

Spencer Mindlin, 33, and Alfred Mindlin, 68, reaped at least $57,000 in illicit profits by trading in December 2007 and March 2008 “with knowledge of massive, market-moving trades” that Goldman Sachs​ planned to execute in four securities, the Securities and Exchange Commission said yesterday in a statement. The claims were outlined in an administrative proceeding filed by the SEC’s enforcement unit.

Safdie’s $413 Million Glass Tent, Big Onions Thrill Kansas City

The exterior of the Kauffman Center for the Performing Arts in Kansas City. Designed by Boston architect Moshe Safdie, of Safdie Architects, the $413-million center opened Sept. 16, 2011.

The new Kauffman Center for the Performing Arts faces downtown Kansas City, Missouri, with two bulging stainless-steel onions, sliced vertically. They cover a city block.

I liked them immediately. Their primal volumes glint in the sharp sunlight as evocatively as the paint-peeling grain silos that line nearby railroad lines.

The onions are the back of the building.

ABS Conflicts, Investment Advisors, UBS-Swiss Risk: Compliance

The U.S. Securities and Exchange Commission proposed barring bets against asset-backed securities by underwriters and securitization participants to root out conflicts of interest that might harm investors.

SEC commissioners voted 4-0 yesterday to seek comment on a rule, required by the Dodd-Frank Act, that would restrict those who package or sponsor asset-backed securities from engaging in deals that put their interests in conflict with buyers for a year after the first closing of a sale.

Poker-Playing ‘Apprentice’ Duke Tests Appetite for New League

Annie Duke, the poker player who reached the finale of 2009’s “Celebrity Apprentice,” says Texas hold ‘em pros are embracing her new league for the game’s elite. She’ll soon find out if TV viewers feel the same.

Telecasts of “Epic Poker League,” which restricts its main tournaments to qualifiers, premiere Sept. 30 on Discovery Communications Inc. (DISCA)’s Velocity network and Oct. 8 on CBS Corp. (CBS)’s namesake channel, according to Duke, the Epic league’s commissioner and co-founder of parent Federated Sports & Gaming Inc. in Los Angeles. A focus on top professionals will distinguish it from rivals, she said.

“Every other sport, even snowboarding and skateboarding, had a format where the best players in the world could play against the each other,” Duke, 46, said last week in an interview. “There’s a lot of value to limiting your field, both for the player experience and for the fan experience.”

Jefferies-Nasdaq, Colorado Plan, Hynix, Primary Global, SAP in Court News

Jefferies Group Inc. (JEF) sued International Derivatives Clearing Group LLC, accusing the Nasdaq OMX Group Inc. unit of fraud and breach of contract in connection with interest-rate swap futures contracts.

Jefferies & Co., the investment bank that has been expanding since the financial crisis, claimed in the suit that IDCG and its International Derivatives Clearinghouse unit induced it to enter into the contracts by saying the investment would be “economically equivalent” to transactions in similar instruments in the over-the-counter market. The suit was filed Sept. 16 in New York state court.

Dealers Add Treasuries in Biggest Buying Spree Since ‘07

The Fed holds $1.66 trillion of Treasuries, including $520 billion of debt due in 2014 and sooner.

Wall Street’s biggest bond traders are stockpiling Treasuries at the fastest pace since 2007 on speculation the Federal Reserve will announce a plan this week to buy longer-term debt to spur the faltering economy.

The 20 primary dealers held $15.1 billion of Treasury securities due in more than one year as of Sept. 7, up from a $75 billion bet against the debt on May 6, Fed data show. The last time dealers bought bonds at such a rapid pace was between July 2007 and September 2007, as losses on subprime mortgages began to infect credit markets and the central bank unexpectedly cut interest rates.

All but one firm expects the central bank to announce some type of what traders call Operation Twist, according to a Bloomberg News survey, the latest step by the Fed in its four- year effort to keep the economy out of a recession. U.S. debt due in 10 years or more has returned 17 percent this quarter, the most since the last three months of 2008, as unemployment holds above 9 percent and growth slows.

Easing SEC Regulations, Volcker Rule, UBS U.K. Trader Charged: Compliance

House Republicans have embraced at least one proposal in President Barack Obama’s jobs package: changing the rules to make it easier for closely held companies to raise money without going public.

Republicans have already lined up with hearings and bills to support expanding exemptions from U.S. Securities and Exchange Commission rules for companies trying to raise capital, and two lawmakers introduced legislation Sept. 15.

Wall Street May Be Blocked Off Again

Demonstrators rally on Wall Street in lower Manhattan in New York, U.S., on Saturday, Sept. 17, 2011.

New York City police may limit access to Wall Street for a third day, requiring workers and residents to show identification, after a weekend of protests targeting financial firms.

The arrangements, including the identification requirement, “will be re-assessed” this morning, Paul Browne, a police spokesman, said in an e-mail.

KKR Gathers $1 Billion for Mezzanine Fund to Finance Private-Equity Deals

KKR & Co., the private-equity investor behind three of the four biggest leveraged buyouts in history, has raised more than $1 billion for its first fund to originate debt for takeovers.

KKR Mezzanine Partners I aims to finance private-equity investments and corporate acquisitions, the firm said today in a statement. The mezzanine business will finance mostly third- party transactions.

KKR Co-Chairmen Henry Kravis and George Roberts have charged William Sonneborn, chief of KKR Asset Management, with adding products and exploiting investment opportunities beyond traditional leveraged buyouts as the 35-year-old firm seeks new sources of revenue. The mezzanine fund will try to take advantage of a climate in which financial turmoil has crimped bank lending.

Accused Financier Allen Stanford ‘Complains of Amnesia’:

R. Allen Stanford, the former Texas financier being held on charges involving a $7 billion Ponzi scheme, says he’s suffering from amnesia and can’t remember events prior to his arrest in June 2009, the Wall Street Journal reported, citing a person familiar withe the matter.
U.S. District Judge David Hittner will hear a doctors’s report on Stanford’s condition soon, the newspaper said.

SOURCE

NYSE Owners Lose Big on German Embrace

Traders work on the floor of the New York Stock Exchange in New York, U.S.

Duncan Niederauer’s embrace of Deutsche Boerse AG (DB1) is transforming NYSE Euronext’s “merger of equals” into the worst takeover in America.

Since the owner of the New York Stock Exchange agreed in February to sell itself in return for equity in Deutsche Boerse, the value of the $9.53 billion agreement has plummeted by 21 percent, according to data compiled by Bloomberg. The decline is the largest of any all-stock takeover worth $1 billion or more. The offer is now below NYSE Euronext’s share price before the two venues said they were in talks to merge.

Boehner Asks Debt Panel to Take on Tax Breaks, Reject Hike

John Boehner spoke in May to Wall Street leaders at the Economic Club of New York, where he said congressional Republicans wouldn’t let the U.S. default on obligations to bondholders in the debate over raising the nation’s debt limit.

House Speaker John Boehner called on the congressional debt-reduction supercommittee to lay the foundation for a tax-code overhaul that would reject rate increases and curb some tax breaks.

In a speech to the Economic Club of Washington today, the Ohio Republican said the 12-member panel should recommend $1.5 trillion in budget savings by focusing solely on cuts to federal spending and overhauling Social Security, Medicare and Medicaid. The panel should fashion “principles” for a later, broad rewrite of the tax code that include lowering tax rates for individuals and companies, he said.

Obama Picks a Fight to Define 2012 Election: Margaret Carlson

At least the charade is over. For far too long, President Barack Obama clung to the notion that we can all get along in a bitterly divided capital and nation.

He’d come to look like a chump being rolled -- and rolled again -- by his Republican opposition. His most ardent supporters were losing faith as he sought to show independents what a reasonable fellow he is.

Goldman Sachs Shuts Global Alpha Fund

A pedestrian passes 200 West Street, which houses the headquarters of Goldman Sachs Group Inc., in New York, U.S. Goldman Sachs has been shrinking Global Alpha since 2007 when it lost 40 percent because of bad bets on currencies, equities and bonds worldwide.

Goldman Sachs Group Inc. (GS), the fifth-biggest U.S. bank by assets, will shut its Global Alpha fund after clients pulled money from the quantitative trading pool that was once the firm’s largest hedge fund.

Barclays Leads LBO Financing Retreat

Barclays Plc., headquarters in Canary Wharf financial district in London.

Barclays Plc (BARC) is leading investment banks in a retreat from a form of leveraged buyout financing that has made the firms and their clients vulnerable to allegations of a conflict of interest.

Barclays changed its policy following a February opinion from a Delaware judge, who said the bank deceived Del Monte Foods Co. (DLM) when it advised the company on a sale and failed to disclose its plans to also arrange funding for the buyer until late in the process. That funding, also known as sell-side financing, allowed Barclays to collect about twice as much in fees than it would have gotten from just offering M&A advice.

Bank ‘Living Wills,’ Adviser Rule, Zamora Resigns: Compliance

U.S. regulators approved two sets of guidelines that banks including Citigroup Inc. (C) and JPMorgan Chase & Co. (JPM) will have to follow in drafting plans to protect the broader economy in the event of their own collapse.

EU Transactions Tax, India Yuan Loans Decision, SEC Swap Rule: Compliance

The European Union’s planned tax on financial transactions should have a “broad base” covering equities, bonds, currencies and derivatives to ensure it can’t be evaded, the finance ministers of France and Germany said.

The levy should be imposed when at least one party to a trade is located in the EU, with territorial coverage in the region to be “as broad as legally permissible,” Germany’s Wolfgang Schaeuble and France’s Francois Baroin said in a joint letter to the European Commission published Sept. 9.

The commission, the 27-nation EU’s executive arm, last month said it will draw up proposals for a transaction tax before a summit of world leaders in November, backing calls by French President Nicolas Sarkozy and German Chancellor Angela Merkel for the levy.

Germany Readies Surrender Over Greece

Germany's chancellor Angela Merkel.

Germany may be getting ready to give up on Greece, as measures in the credit markets signal growing concern about the smaller nation’s ability to repay investors.

Yields on Greek two-year notes rose as much as 12 basis points today to a record 57.10 percent as of 8:25 a.m. London time. Credit-default swaps to insure the country’s five-year bonds and to speculate on government securities closed at a record 3,500 basis points on Sept. 9, according to CMA. The contracts are the highest in the world and more than three times the 1,134 basis points on Portugal’s debt.

Friedman Ignores Trotsky, Blasts Both Parties for U.S. Decline: Review

“A country that steps up to the challenges that it faces and masters them is the country that used to be us.”

Not very encouraging words, but the authors of “That Used To Be Us,” Thomas L. Friedman and Michael Mandelbaum, insist they’re optimists.

“We want to maintain American greatness,” they write. “We’re Fourth of July guys.” Hence the U-turn of their subtitle: “How America Fell Behind in the World It Invented and How We Can Come Back.”

They’re convincing on the fell-behind part -- so convincing that I found their chipper, can-do tone grating. They’re like a doctor who says you have stage-four cancer and then adds brightly, “Think of it as an opportunity!”

Friedman and Mandelbaum identify the four major challenges the U.S. faces as globalization, the information revolution, astronomical deficits and the lethal combination of runaway energy consumption and climate change. The sensible measures they offer in response include more government spending on education, stricter energy standards, higher taxes (especially on fossil fuels) and cuts to Medicare and Social Security benefits.

Good luck with that.

Obama Says Decade Since Sept. 11 Terror Attacks Proves American Resilience

U.S. President Barack Obama marked the 10th anniversary of the Sept. 11, 2001, terrorist attacks by emphasizing Americans’ perseverance, saying for all the wars, disruptions and soul-searching of the past decade the country’s values and optimism remain.

Japan Stocks Fall to Lowest Since 2009 on Europe’s Worsening Debt Crisis

Japanese stocks fell for a third day, pushing the benchmark Nikkei 225 Stock Average to the lowest close since April 2009, as Europe’s worsening debt crisis saps demand for riskier assets.

Mitsubishi UFJ Financial Group Inc. (8306), Japan’s biggest lender, fell 2.7 percent after the cost of insuring against default on European sovereign and financial debt surged to records. Toshiba Corp. (6502), Japan’s largest maker of nuclear power plants, sank 5.1 percent after a newspaper said the company is in talks to buy Shaw Group’s 20 percent stake in Westinghouse Electric, a reactor builder. Kansai Electric Power Co., a nuclear-power operator, jumped 3.5 percent after Japan’s new prime minister indicated his support for atomic energy.

Pools Mist Names of the Dead With Grace at 9/11 Memorial; James S. Russell

As a breeze whips the veils of water cascading into the 9/11 memorial’s pools, sparkling garlands dissolve into mist.

Water falls in the north pool of The National September 11 Memorial and Museum in New York. Pools are located on the sites of the two towers of the World Trade Center destroyed in the terrorist attacks.

The dancing waters don’t strike the solemn note I expected from this shrine to 2,983 deaths on the site of the World Trade Center’s twin towers.

CEOs Cutting Forecasts Fall 38% With S&P Cheapest in September Since 1985

Lowe’s Cos., the second-largest U.S. home-improvement retailer, was among the 138 companies that cut estimates last month.

The number of chief executive officers cutting profit forecasts fell 38 percent below average last month, even as the slowing economy pushed valuations to the lowest level at the start of September since 1985.

Toshiba Falls on Report Company May Buy Shaw Group’s Stake in Westinghouse

Toshiba, which already owns 77 percent of Westinghouse, is in talks to buy out Shaw Group’s 20 percent holding in the Pittsburgh-based company, the Journal reported, citing people it didn’t identify.

Toshiba Corp. (6502), Japan’s biggest maker of nuclear reactors, fell to the lowest in more than two years in Tokyo trading after the Wall Street Journal said the company may buy Shaw Group Inc. (SHAW)’s stake in Westinghouse Electric Co.

When the U.S. Was Big: The Ticker

For the U.S., 1950 was a far more perilous moment than the present. The world was still digging its way out of the most expansive and destructive war in human history. The U.S. confronted a powerful and provocative foe sworn to its destruction and armed with fast-growing nuclear capabilities. The USSR eagerly probed the globe– Greece, Austria, Iran, Turkey, Germany, Korea – for weak points in a western alliance organized and guaranteed solely by U.S. resolve.

Berkshire Says BofA Dividends Will Be Taxed at 14.175% Rate

Warren Buffett’s Berkshire Hathaway Inc. (BRK/A) said dividends on its $5 billion in preferred shares of Bank of America Corp. (BAC) will be taxed at a 14.175 percent rate because the securities will be held in insurance units.

Jain Fails to Repeat Deutsche Bank Debt Success With Equity

Deutsche Bank AG head of corporate and investment banking Anshu Jain.

Anshu Jain, the head of Deutsche Bank AG (DBK)’s investment-banking division, earned a promotion to co- chief executive officer of Germany’s biggest bank last month by cementing its status as a debt-trading powerhouse.

Wall Street Trader Hires Chopper to Flee Floods

People walk along a washed out section of Route 12 on Aug. 29, 2011 in Berlin,

With the bridges out in Pittsfield, Vermont, and its 400 residents marooned, Wall Street trader Scott Redler took matters into his own hands: He hired a helicopter and was back home in New Jersey yesterday afternoon.

Exchanges to Shed Sandbags as Irene Passes

U.S. flags fly outside the New York Stock Exchange after a large flag that hangs over the columns was removed in New York.

Goldman Sachs Group Inc. (GS) and Citigroup Inc. (C), whose offices in New York’s evacuation zone for Hurricane Irene escaped major damage, are among Wall Street banks that will resume business today as exchanges open. Employees still face a gauntlet getting there.

Big Banks Bet Crude Oil Prices Would Fall in 2008 Run-Up, Leaked Data Show

The records of oil futures and derivatives trades in the first half of 2008 were compiled by the Commodity Futures Trading Commission and made public Aug. 19 by Senator Bernie Sanders.

Just before crude oil hit its record high in mid-2008, 15 of the world’s largest banks were betting that prices would fall, according to private trading data released by U.S. Senator Bernie Sanders.

The net positions of the banks undermine arguments made by Sanders that speculative trades on Wall Street drove oil prices in 2008, said Craig Pirrong, director of the Global Energy Management Institute at the University of Houston. Retail gasoline reached a record $4.08 a gallon on July 7, 2008, and oil peaked at $147.27 a barrel on July 11 that year.

‘Rockefeller Country’ Real-Estate Values in Maine Making the Rich Richer

The Rockefellers, the Morgans and the Astors, the most powerful Gilded Age families, knew how to pick real estate. The worth of the properties they once owned on Mount Desert Island in Maine has soared during the national real estate bust.

Americans watched their home values tumble an average of 29 percent from the start of the real estate collapse in 2006, according to the Federal Reserve. Mount Desert estates owned by the descendants of oil and industrial barons gained by almost the same amount, according to local records.

While the recession erased more than 8 million jobs and brought the home-construction industry to a grinding halt, billionaire Mitchell Rales bought a $5.5 million estate and tore it down to build a $25 million mansion on Mount Desert in Maine, the U.S. state with the highest proportion of vacation homes, according to new figures from the 2010 U.S. census.

“The upper end has survived the crash better than most,” said Gary Fountain, a broker at Mount Desert Island Real Estate in Bar Harbor. “There are still plenty of Learjets parked at the Bar Harbor airport every weekend.”

Most Junior Bankers Feel ‘Disappointment’ With Pay, Aspire to Buyout Jobs

Junior investment bankers to Wall Street: Take this job and shove it.

While young bankers said they enjoy their jobs, most are dissatisfied with pay and hope to leave the field, with almost 60 percent saying they want to work in private equity, according to a survey released yesterday by headhunting firm Capstone Partnership.

“It’s been a rough couple of years for them,” Rik Kopelan, managing partner at New York-based Capstone, said in a phone interview. “Fewer and fewer plan on making it a career, because they’re working these long hours and not getting paid as well as they were.”

One investment banker who participated in the survey described a breach of the “tacit understanding” that he or she would be well compensated. Considering “the sacrifice I make in my personal life (100-hour work weeks, canceled vacations, etc.), this business has to be more rewarding,” the person said, according to Capstone.

Strauss-Kahn, Spitzer, Motorola, Bank of America in Court News

Prosecutors asked a judge to dismiss all criminal charges against Dominique Strauss-Kahn, the former International Monetary Fund chief accused of sexual assaulting a hotel maid who lied to authorities about some details of her life and the case.

“The nature and number of the complainant’s falsehoods leave us unable to credit her version of events beyond a reasonable doubt whatever the truth may be about the encounter between the complainant and the defendant,” the office of Manhattan District Attorney Cyrus Vance Jr. said in a filing yesterday in Manhattan. “If we do not believe her beyond a reasonable doubt, we cannot ask a jury to do so.”

UBS, Bank of America, Duane Reade, Spitzer, Goldman Sachs: Compliance

U.S. prosecutors won a victory in their crackdown on offshore tax evasion when a federal appeals court said a former UBS AG (UBSN) client must turn over his bank records to a U.S. grand jury.

The client, identified only as M.H., must produce records sought by a federal grand jury in San Diego, according to the U.S. Ninth Circuit Court of Appeals. A three-judge panel rejected M.H.’s constitutional argument that the Fifth Amendment right against self-incrimination should cover records on foreign bank accounts.

Analyst Estimates 10 Times Higher Than GDP

Traders work on the floor of the New York Stock Exchange in New York, U.S.

At a time when U.S. equities have lost $2.9 trillion in market value, stock analysts are twice as bullish as they’ve been over the past 56 years when compared with economists.

Euro-Bonds, Nuclear Regulations, CFTC, Moodys-S&P MBS Ratings: Compliance

European Union regulators may push for joint bond sales by euro-area nations to help contain the debt crisis, putting pressure on Germany to drop its opposition.

The European Commission said it may present draft legislation on euro bonds when completing a report on the feasibility of common debt sales. The commission, the EU’s regulatory arm in Brussels, earlier this year opposed such a step because of German-led objections.

News Corp. Holds Talks On Governance Concerns

News Corp. (NWSA) Chief Operating Officer Chase Carey, reacting to the scandal over phone hacking at the News of the World tabloid, is holding discussions with some large investors over governance and other concerns.

The California State Teachers’ Retirement System, which held 3.86 million News Corp. Class A shares as of June 30, is among those participating, said Ricardo Duran, a spokesman.

“Calstrs is involved in the engagement process, which includes sending letters, holding conference calls and meetings, with News Corp. management,” Duran said in an e-mail. “Because this is delicate, we cannot say anything further about our efforts.”