Big Stock Offering by Japan Airlines Is Overshadowed by China\'s Anti-Japanese Protests

TOKYO - Japan Airlines returned to the stock market on Wednesday after the biggest initial public offering this year since Facebook, but the carrier's debut was overshadowed by anti-Japanese protests in China that has hurt travel between the two countries.

JAL shares failed to sustain a rally in their opening minutes on the Tokyo Stock Exchange, settling at around 3,830 yen ($48.56) after 90 minutes of trade, barely above its 3,790 ($48.05) offering price that valued the airline at $8.5 billion. That performance came as somewhat disappointing after JAL shares had jumped as much as 10 percent in the gray market and underscored investor anxiety over the airline's potential in a notoriously volatile industry.

Shares in Japan's former flagship carrier had been priced at the top of a range set deliberately low to stoke investor interest in the airline's re-listing, just 30 months after its bankruptcy in 2010. By setting a low target, JAL hoped to avoid the fate of F acebook, which misjudged investor demand and saw its share price slump below its offering price on its second day of trade.

But Tokyo-based JAL also found itself under pressure to raise ample funds to return to state coffers the 350 billion yen ($4.4 billion) in bailout money it received to finance its corporate turnaround. With its I.P.O., JAL doubled the investment that a state-backed fund made in the carrier in 2010. That fund, the Enterprise Turnaround Initiative Corporation of Japan, is thought to have sold its 96.5 percent stake in JAL, netting a $4 billion profit.

JAL's offering caps two years of intense reorganization that eliminated 21,000 jobs or about a third of the airline's work force, cut pilots' salaries by 30 percent, slashed pensions and retired the company's prized jumbo jets. It dropped a third of its international routes and halved the number of its group companies.

Its balance sheet is now the envy of the industry, its 17 percent operat ing margin for the latest fiscal year are more than double that of the likes of Delta, United Continental and JAL's domestic nemesis, All Nippon Airways.

But JAL has also become a far smaller airline with a more limited global reach and capacity that may be ill-positioned to tap into growth, especially in Asia, where the aviation industry is most likely to have its fastest growth. Earnings at the airline have shrunk in line with its cuts: operating revenue fell by almost 40 percent between 2008 and 2011 to 1.2 trillion yen, and a further drop in earnings is projected for the current fiscal year.

Reflecting its shrunken ambitions, JAL's fleet of 169 aircraft is now made up of mid and small planes like the Boeing 787. The downsized fleet helps cut costs and raise profitability now but could limit growth in the long run, especially compared with regional rivals like the Emirates and Singapore Airlines, which are investing aggressively in their fleets.

JAL is a lso struggling to reposition itself against the rise of low-cost carriers in Asia, which are finally starting to make forays into Japan's highly-protected domestic market. JAL introduced JetStar, a low-cost venture with Qantas Airways, just two months ago.

JAL benefited in its turnaround from a write-down of its fleet, government-arranged debt waivers and $4.5 billion in tax credits allowing the airline to offset corporate tax for almost a decade.

These measures have sparked intense criticism from All Nippon Airways, which has lobbied politicians to level the playing field by prioritizing it over JAL in coveted landing slot allocations at Tokyo's airports. If Nippon is successful, JAL could lose air traffic.

In midterm financial targets, JAL has pledged to keep its operating margin at 10 percent. It issued 175 million shares in its I.P.O., of which 131.25 million have been allocated to Japanese investors and the remaining 43.74 million to investors overseas .

The I.P.O.'s of Facebook and JAL have ranked among the year's most highly anticipated offerings. But both companies have faced some tough luck beyond their control. Facebook's debut was marred by technical errors.

JAL's first day of trade in Tokyo came amid raging anti-Japanese protests in China over competing claims to a set of disputed islands, a spat that threatens to depress travel between the two countries.

Both Chinese and Japanese officials have called for calm after protesters staged rallies in more than 100 Chinese cities, vandalizing Japanese businesses and forcing some Japanese manufacturers to suspend operations.

Behind Goldman Sachs\'s Success Is a Focus on Survival

It wasn't long ago that Goldman Sachs was painted as an outsize villain of the financial crisis, and its future seemed hazy. Today, however, Goldman Sachs has retained its clients and its dominance. And recent missteps by its competitors are putting the investment bank in pole position to profit when a recovery comes.

It's not here yet. The investment banking business is in a miserable state. According to Dealogic, worldwide revenue for the investment banking industry was down 26 percent in the first half of 2012 from the same period a year ago.

Goldman, too, is suffering in this downturn, but it has held its investment banking pre-eminence. In the first half of 2012, according to Dealogic, Goldman Sachs ranked third among banks in domestic and global equity capital markets rankings. In the league tables for global advice on mergers and acquisitions, Goldman was No. 1 worldwide and in the United States.

Over all, according to Dealogic, the firm had $1.7 b illion in investment banking revenue for the first half of 2012 and was third in the global rankings. This is a feat since the firm doesn't have the lending capability of JPMorgan Chase, No. 1 in the global rankings, or Bank of America Merrill Lynch, No. 2.

As for sales and trading, traditionally the heart of the banks' revenue, Goldman's institutional client services segment had $9.6 billion in net revenue in the first half of this year - down about 5 percent from the previous year. But compare this with Morgan Stanley, where sales and trading revenue was $4.4 billion, down more than 32 percent.

The numbers show that despite contentions that Goldman had traded against its clients by shorting the housing markets, clients have not fled. And some of Goldman's competitors have changed or made missteps in ways that will help the bank in the future.

JPMorgan, for one, has been hurt by the billions in trading losses out of its chief investment office unit. The ba nk's chief executive, Jamie Dimon, has to confront the likelihood of significantly increased oversight by regulators.

Another big competitor, Barclays, has been bogged down by an interest rate manipulation scandal that forced an upheaval in its executive ranks. It, too, will also face increased regulatory oversight, not to mention litigation.

Citigroup is sorting out whether it wants to be a consumer bank or an investment bank or something in between as it tries to achieve a turnaround. But the bank clearly no longer has aspirations to be the global supermarket that its former chief executive, Sanford I. Weill, hoped for it to be. Where Citigroup's investment banking division fits in this puzzle is still unknown, probably even to the bank's executives.

The vision in the late 1990s was that a bank could offer both commercial and investment banking services and that it could leverage its ability to lend billions of dollars to gain investment banking business. The recent troubles of the big banks suggest that this dream is over.

Any benefits from being both a commercial lender and an investment bank are outweighed by huge regulatory hurdles. The army of regulators and compliance officers required to oversee the operations of these banks is an increasing drain on their ability to make money.

Goldman has taken steps to heal itself from self-inflicted wounds. In the uproar after the financial crisis, Goldman Sachs formed a business standards committee to examine practices and recommend change. The committee put forth 39 recommendations to improve governance and client relations. In response, the firm has fundamentally realigned its business segments. Goldman has also overhauled its board, revised its public relations strategy and put in place stronger clawback policies.

The firm has also made every effort to move past financial crisis allegations. It paid $550 million to settle Securities and Exchange Commission ac cusations that it misled investors in a mortgage-related security. Recently the Justice Department announced that it would not pursue charges related to accusations that Goldman shorted the housing market while selling products to clients betting the opposite.

The financial crisis has also forced Morgan Stanley - long Goldman's main rival in investment banking - to change its business model substantially. Morgan Stanley has struggled with its smaller capital base and an undiversified business. To solve this problem, it recently reached an agreement to acquire the entire Smith Barney brokerage operations. But that means that Morgan Stanley may become more of an asset manager than an investment bank. And the controversy over the Facebook initial public offering is not likely to have helped Morgan Stanley, which led the offering and has been vying with Goldman to underwrite other hot technology I.P.O.'s.

As a result, Goldman is becoming the last pure-play, big inves tment bank. In a world where business consultants preach that a focus on your best business lines is necessary to success, Goldman is likely to have an advantage over the banking conglomerates.

And instead of diversifying, Goldman is taking steps to retain its focus. Goldman did not spin off its private equity arm, GS Capital Partners, to comply with the Volcker Rule. Instead, it kept the operation in-house by financing it through outside money rather than Goldman's. Other banks have also retained their private equity arms, but Goldman's was always the biggest and it faced the most pressure to divest. Keeping GS Capital Partners will maintain the firms' edge in playing a part in takeover deals.

Still, it's not going to be an easy ride for the bank. Goldman will continue to be a flash point and a target as a symbol for the financial crisis and greed in general. Moreover, Greg Smith, the former Goldman employee who publicly resigned through an opinion article in Th e New York Times, has a memoir coming out this fall called “Why I Left Goldman Sachs.”

It may again send Goldman into damage control mode. But if the firm's clients haven't left already, why would they now? Goldman is more regulated now than before the financial crisis, but it seems as if it will not face prosecution for any of its activities, and its competitors are having more problems with regulators. Mr. Smith's book is unlikely to change anything.

The stock market agrees. Goldman's stock price is up about 25 percent this year, beating out JPMorgan, Morgan Stanley and Citigroup.

Investment banking may be down, but it will eventually return. And the remarkable story will be that Goldman, despite the controversies it has faced, has put itself in a position to not only profit but continue its dominance. It's a case study in business survival and reputational repair. The protesters at Occupy Wall Street will not be happy. But neither will Goldman's comp etitors.

Steven M. Davidoff, writing as The Deal Professor, is a commentator for DealBook on the world of mergers and acquisitions.

Anschutz Said to Explore Sale of Entertainment Group

The Anschutz Corporation is weighing a sale of Anschutz Entertainment Group, an enormous sports and entertainment company, a person briefed on the matter told DealBook on Tuesday.

It isn't clear how much a sale would fetch, and Anschutz, which is controlled by its namesake billionaire owner, Philip Anschutz, may still decide against a sale.

Based in Los Angeles, Anschutz Entertainment has grown into a multi-armed entertainment giant, involved in running facilities like the Staples Center in Los Angeles; owning sports teams like the Los Angeles Kings hockey team; and selling tickets through its AEG Live subsidiary.

News of the deliberations was reported earlier by The Wall Street Journal online.

Blackstone to Buy Control of Vivint, a Home Security Provider

The Blackstone Group has agreed to buy control of Vivint, a provider of home security services, for more than $2 billion, Vivint's chief executive said in an interview on Tuesday.

Blackstone will be purchasing the privately held company from its existing sponsors, including Goldman Sachs, Jupiter Partners and Peterson Partners, with Vivint's management rolling over a substantial portion of their ownership holdings. After the deal closes, Blackstone will own more than 50 percent of the company.

The buyout firm emerged as the winner of an auction held by Vivint's bankers at Bank of America Merrill Lynch and Citigroup.

“It's a great opportunity for our existing partners to exit with a great return,” Todd Pederson, the company's chief executive, told DealBook. “And for Blackstone, there's a fantastic future return on its investment.”

The deal is aimed at helping Vivint continue its growth as a major provider of automated home services. Such comp anies are attractive to private equity firms because of the steady subscriber fees that they charge customers, which can go toward servicing the debt taken on in an acquisition.

Founded in 1999 in Utah as APX Alarm, the company rapidly expanded, using a small army of door-to-door salespeople. It has since branched out from the home security industry, where the company reckons that it trails only ADT in North America by recurring revenue, to newer services like automated lighting and climate control.

Mr. Pederson said that one increasingly important initiative is the installation and management of solar-power systems, where it hopes to surpass existing industry players like SolarCity in about 18 months.

“Staying out in front and trying to be disruptive in the services we're in is super important,” he said. “We try to be very forward-thinking.”

Vivint's growth has been so strong that the company hasn't had to turn to acquisitions to continue its trajectory, Mr. Pederson said. Though the company will have more financial resources under Blackstone, he said that his thinking hasn't changed.

“I'm not saying that would never be the case, but growth has never been a problem,” he said.

One issue that has dogged the company, however, is customer complaints. The company has amassed 1,452 complaints over the past three years, according to the Better Business Bureau in Utah. Many have contended that the company's sales representatives were too aggressive or offered misleading “free” systems, and the company has had to settle legal disputes with the likes of the Oregon Department of Justice.

Mr. Pederson argued that Vivint takes customer complaints seriously and estimates that the total percentage of dissatisfied customers since 2009 is approximately 0.2 percent.

“Some states look at business that are growing and thriving as a revenue source,” he said. “I don't like having 1,500 complaints , but as a percentage we think we're doing pretty good.”

Goldman\'s Longtime C.F.O. to Retire

Goldman Sachs said Tuesday that David A. Viniar, the bank's longtime chief financial officer, would retire at the end of January and be replaced by Harvey Schwartz, a senior executive at the bank.

Mr. Schwartz has big shoes to fill. Both inside and outside the bank, many consider Mr. Viniar to be the bank's most valuable executive, a financial wizard and deft risk manager with a mastery of Goldman's complex multi-billion dollar balance sheet.

Though far less well known than Goldman's chief executive, Lloyd C. Blankfein, Mr. Viniar has played a key role in navigating the bank through some of history's most tumultuous markets. He has served as C.F.O. since 1999, the year of Goldman's initial public offering, and played a key role in managing the bank - largely with success - through the global financial crisis.

“David has made extraordinary contributions to Goldman Sachs over a remarkable 32-year career,” said Mr. Blankfein in a statement, which describ ed him as the longest serving C.F.O. of a major institution on Wall Street. “David represents the very best of Goldman Sachs and its culture.”

Mr. Viniar will become a member of Goldman's board of directors upon his retirement.

Mr. Schwartz, 48, who currently co-heads Goldman's securities division, joined Goldman in 1997 after spending the early part of his Wall Street career at Citigroup. He earned his college degree from Rutgers and an M.B.A. from Columbia University.

“Harvey's risk management judgment and broad understanding of our business and our clients have defined his career and will be the basis of his strengths as an effective C.F.O.,” Mr. Blankfein said in the statement.

Alibaba Closes Deal to Buy Back Shares From Yahoo

The Alibaba Group said on Tuesday that it had closed on the repurchase of a 20 percent stake in itself from Yahoo, taking the first major step toward a long-held goal of regaining full control of its destiny.

The Chinese Internet company paid about $7.1 billion for the stake, made up of cash and preferred shares. It also paid Yahoo a onetime fee of $550 million to reorganize their existing technology and patent licensing agreement.

The stock repurchase is part of a comprehensive agreement worked out between Alibaba and Yahoo four months ago, kicking off the unwinding of a partnership began when the American company bought a 40 percent stake in late 2005. Over the past few years, both sides have engaged in on- and off-again talks about the return of that stake, negotiations that have sometimes been heated.

Under the terms of the agreement reached in May, Yahoo will sell half of its stake back now. It will sell an additional 10 percent of Alibaba when the C hinese Internet company files to go public in the next few years, and then divest the remainder sometime after that.

Alibaba has spent the past several months crisscrossing the world, raising the requisite financing for the stock buyback from investors like the China Investment Corporation, the Chinese private equity firms Boyu Capital and Citic Capital and the China Development Bank. Existing investors like Silver Lake, DST Global and Temasek also participated.

It also received $2 billion in financing from a panoply of banks: Australia and New Zealand Banking Group, Barclays, Citigroup, Credit Suisse, DBS Bank, Deutsche Bank, Mizuho, Morgan Stanley and the China Development Bank.

“The completion of this transaction begins a new chapter in our relationship with Yahoo,” Jack Ma, Alibaba's chairman and chief executive, said in a statement. “We are grateful for Yahoo!'s support of our growth over the past seven years, and we are pleased to be able to del iver meaningful returns to our shareholders including Yahoo.”

The deal will give Yahoo an enormous sum of money that it can use to finance the struggling Web pioneer's latest efforts to turn itself around. While the company had previously earmarked the bulk of the transaction's proceeds for shareholder-friendly steps like a stock buyback, its new chief executive, Marissa Mayer, is still reviewing what she will ultimately do with the money.

Business Day Live: Ford and Canadian Workers in Tentative Deal

Canadian labor deal puts pressure on Chrysler and General Motors. | Debt collectors find a partner in prosecutors.

Manchester United\'s 4th-Quarter Loss Widens

Manchester United's net loss for its fourth quarter widened significantly from the year-ago period, the soccer club said on Tuesday in its first earnings report as a publicly traded company.

The club's loss grew to £14.9 million from £400,000 ($25.2 million, from $649,000). Its revenue tumbled 25 percent, to £74.5 million.

For the 2012 fiscal year, the company said that it earned £23.3 million, or $37.9 million, for the year, as revenue from its commercial revenue rose. But overall revenues dipped 3 percent, to £320.3 million.

With its initial public offering last month, Manchester United has become one of the few sports teams to brave the public markets in years, and certainly one of the biggest. And along the way, it has had to combat the perception that athletic enterprises generally don't perform well in the public markets.

The team has argued that it is more than just an assemblage of soccer players dependent on ti cket sales, but a full-fledged media empire with plenty of revenue sources. The club said that its commercial revenue, which draws in money from sponsorships and merchandising, grew nearly 14 percent last year, to £117.6 million, thanks to a high number of renewals and growth in the new media and mobile business.

And the club's $559 million sponsorship deal with General Motors is significantly higher than its previous partnership with the insurer Aon.

“We are delighted to announce our first results as a NYSE listed company; fiscal 2012 was the best year ever for Manchester United's commercial business,” Ed Woodward, the company's executive vice chairman, said in a statement.

But other parts of Manchester United's business haven't performed as well. Broadcasting revenue fell more than 11 percent, to £104 million, though the club promises a forthcoming increase in TV rights to Premier League UK games beginning in the 2013 season. And gameday r evenue also slid 11 percent, to £98.7 million, as the team failed to progress beyond the group stage of the Champions League this past season.

Investors appeared little moved by the earnings news, with shares in Manchester United rising less than 1 percent in early morning trading, to $13.05. They have fallen 7 percent since the I.P.O. last month.

An Enigma in the Mortgage Market That Elevates Rates

Imagine a 30-year mortgage on which you only pay 2.8 percent in interest a year.

Such a mortgage could already exist, but something in the banking system is holding it back. And right now, few agree on what that “something” is.

Getting to the bottom of this enigma could help determine whether mortgage lenders are dysfunctional, greedy or simply trying to do their job in a sensible way.

Right now, borrowers are paying around 3.55 percent for a 30-year fixed rate mortgage that qualifies for a government guarantee of repayment. That's down from 4.1 percent a year ago, and 5.06 percent three years ago.

Mortgage rates have declined as the Federal Reserve has bought trillions of dollars of bonds, a policy that aims to stimulate the economy. Last week, the Fed said it would make new purchases, focusing on bonds backed by mortgages.

The big question is whether those purchases lead to even lower mortgage rates, as the Fed chairman, Ben S. Bernanke, hopes.

But mortgage rates may not decline substantially from here. Something weird has happened. Pricing in the mortgage market appears to have gotten stuck. This can be seen in a crucial mortgage metric.

Banks make mortgages, but since the 2008 crisis, they have sold most of them into the bond market, attaching a government guarantee of repayment in the process.

The metric effectively encapsulates the size of the gain that banks make on those sales. In September 2011, banks were making mortgages with an interest rate of 4.1 percent. They were then selling those mortgages into the market in bonds that were trading with an interest rate, or yield, of 3.36 percent, according to a Bloomberg index.

The metric captures the difference between the bond and mortgage rates; in this case it was 0.74 percentage points. The bigger the “spread,” the bigger the financial gain for the banks selling the mortgages. That 0.74 percentage point “spread” was clos e to the 0.77 percentage point average since the end of 2007. Banks were taking roughly the same cut on the sales as they were in previous years.

But something strange has happened over the last 12 months. That spread has widened significantly, and is now more than 1.4 percentage points. The cause: bond yields have fallen a lot more than the mortgage rates banks are charging borrowers.

Put another way, the banks aren't fully passing on the low rates in the bond market to borrowers. Instead, they are taking bigger gains, and increasing the size of their cut.

So where might mortgage rates be if the old spread were maintained? At 2.83 percent â€" that's the current bond yield plus the 0.75 percentage point spread that existed a year ago.

It's important to examine why the tight relationship between bond yields and mortgage rates becomes unglued.

One explanation, mentioned in a Financial Times story on Sunday, is that the banks are overwhelmed by the demand for new mortgages and their pipeline has become backlogged. When demand outstrips supply for a product, it's less likely that its price - in this case, the mortgage's interest rate - will fall. There are in fact different versions of this theory.

One holds that bank mortgage operations are still poorly run, and therefore it's no surprise they can't handle an inundation of new applications. Another says banks deliberately keep rates from falling further as a way of controlling the flow of mortgage applications into their pipeline. If mortgages were offered at 2.8 percent, they wouldn't be able to handle the business, so they ration through price, according to this theory.

Another backlog camp likes to point the finger at Fannie Mae and Freddie Mac, the government-controlled entities that actually guarantee the mortgages. The theory is that these two are demanding that borrowers fulfill overly strict conditions to get mortgages. Banks fear that if they don' t ensure compliance with these requirements, they'll have to take mortgages back once they've sold them, a move that can saddle them with losses.

As a result, the banks have every incentive to slow things down to make sure mortgages are in full compliance, which can add to the backlog. Once this so-called put-back threat is decreased, or the banks get better at meeting requirements, supply should ease.

But there is a weakness to the backlog theories.

The banks have handled two huge waves of mortgage refinancing since the 2008 financial crisis. During those, the spread between mortgage and bond rates did increase. But not anywhere near as much as it has recently. And the spread has stayed wide for much longer this time around.

For instance, $1.84 trillion of mortgages were originated in 2009, a big year for refinancing, according to data from Inside Mortgage Finance, a trade publication. In that year, the average spread between bonds and loans was 0.8 9 percentage points. And the banking sector was in a far worse state, which would in theory make the backlog problem worse.

Today, the sector is in better shape, with more mortgage lenders back on their feet. But the spread between loans and bonds is considerably wider. In the last 12 months, when mortgage origination has been close to 2009 levels, it has averaged 1.1 percentage points. This suggests that it's more than just a backlog problem

Some mortgage banks seem to be having little trouble adapting to the higher demand. U.S. Bancorp originated $21.7 billion of mortgages in the second quarter of this year, 168 percent more than in the second quarter of last year.

Wells Fargo is currently the nation's biggest mortgage lender, originating 31 percent of all mortgages in the 12 months through the end of June. In a conference call with analysts in July, the bank's executives seemed unfazed about the challenge of meeting mounting customer demand.

“We 've ramped up our team members in mortgage to be able to move the pipeline through as quickly as possible,” said Timothy J. Sloan, Wells Fargo's chief financial officer. He also said that the bank had increased its full time employees in consumer real estate by 19 percent in the prior 12 months. Not exactly the picture of a bank struggling to expand capacity.

But if banks are readily adding capacity, why aren't mortgage rates falling further, closing the spread between bond yields? Perhaps a new equilibrium has descended on the market that favors the banks' bottom lines.

The drop in rates draws in many more borrowers. The banks add more origination capacity, but not quite enough to bring the spread between bonds and loans back to its recent average.

The banks don't care because mortgage revenue is ballooning. But it all means that the 2.8 percent mortgage may never materialize.

Providence Equity\'s Nelson and Netflix\'s Hastings Join the Giving Pledge

Businessmen like Jonathan M. Nelson and Reed Hastings normally focus on generating the maximum amount of profit from their work as possible. But the two men have joined Warren E. Buffett and Bill Gates in pledging to dole out most of their wealth to charity.

Mr. Nelson, the founder of Providence Equity Partners, and Reed Hastings, the chief executive of Netflix and a board member of Facebook, are among the latest signatories to the Giving Pledge, the initiative announced on Tuesday.

That means that both have committed to giving away at least half of his wealth to philanthropy, a gesture meant to inspire greater charitable giving among the nation's richest denizens. (Skeptics contend that the initiative is little more than a stunt, since many of its members have already given away big sums to charity.)

Others in Tuesday's list include Romesh Wadhwani, the founder of the Symphony Technology Group; Gordon Moore, the co-founder of Intel; Charles R. Bronfman, formerly of the Seagram Company; and Jorge M. Perez, the chief executive of the real estate firm the Related Group.

That brings the total number of families committed to the pledge to 92, putting them in the company of Mark Zuckerberg, Barry Diller and David Rubenstein of the Carlyle Group.

“I always thought if I were lucky enough to be in a position to help others, I would,” Mr. Nelson said in a statement. “The vast majority of Americans are this way. This is who we are.”

His firm, founded in 1989, has become a major player in the business of investing in media and technology companies, with about $27 billion under management. Providence's previous deals include its having taken stakes in the Warner Music Group, Univision and the online video service Hulu.

And Mr. Hastings has become one of Silicon Valley's more prominent executives, given not only Netflix's status, but also his perches on corporate boards like those of Facebook and Microsoft .

Here's the full list of the latest round of Giving Pledge signatories:

• Manoj Bargava
• Charles R. Bronfman
• Dan and Jennifer Gilbert
• Reed Hastings and Patty Quillin
• Peter B. Lewis
• Gordon and Betty Moore
• Jonathan M. Nelson
• Jorge M. and Darlene Perez
• Claire and Leonard Tow
• Albert Lee Ueltschi
• Romesh and Kathleen Wadhwani

Morning Agenda: Is Occupy a Fad?

Occupy Wall Street: From Frenzy to Fad?  |  Occupy Wall Street celebrated its one-year anniversary on Monday as protesters filled the Financial District. But the movement - which initially struck a chord, or a nerve, depending on your view - doesn't seem to be generating the same buzz anymore. As Andrew Ross Sorkin writes, Occupy Wall Street may now be more of a footnote in financial history:

“Have any new regulations for banks or businesses been enacted as a result of Occupy Wall Street? No. Has there been any new meaningful push to put Wall Street executives behind bars as a result of Occupy Wall Street? No. And even on the issues of economic inequality and upward mobility - perhaps Occupy Wall Street's strongest themes - has the movement changed the debate over executive compensation or education reform? It is not even a close call.”< br />

 |  Still, Occupy changed the way we talk. Even the “1 percent” now use the phrase “1 percent.” John Carney of CNBC tweeted: “I reckon #OWS was so successful that the accomplishments have turned invisible. 99% is everyone's term now.”

 |  On Monday, the protesters planned to block access to the New York Stock Exchange by forming a human wall, but the police countered with a blockage of their own, setting up metal barricades.

The number of arrests reached 181 by early evening, police said, according to the City Room blog. A purple-cassocked bishop was arrested, according to Bloomberg News, and at least one person, Richard Swensson, a 24-year-old college graduate, said the demonstrations caused him to miss a job interview.

From the 99% to the 47%  |  While Occupy gave us the “99 percent,” Mitt Romney may be credited with putting the “47 percent” into the popular vernacular.

In a video obtained by Mother Jones, Mr. Romney, the Republican presidential candidate, took aim at the 47 percent - referring to the percentage of people who are said to not pay income taxes. Mr. Romney, at a fund-raising event, described the 47 percent as people who “are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it.” Monday evening, in a hastily called news conference, Mr. Romney stood by the substance of the remarks.

The event took place earlier this year at the home of Marc J. Leder, one of the private equity industry's more colorful deal makers. As The New York Times reported thi s year, Mr. Romney was an early investor in some of the deals done by Mr. Leder's Sun Capital, which oversees about $8 billion.

The Big Banks Keep Getting Bigger  |  European banks, hobbled by the sovereign debt crisis, promised to shrink their balances sheets last year. But the the biggest institutions, like BNP Paribas, Banco Santander, and UniCredit, have only bulked up their size since then. “They have Mario Draghi to thank,” reports Bloomberg News. With an infusion of money from the European Central Bank, the firms just don't feel the pressure to sell off assets.

More Money for Carlyle's Spending Spree  |  The Carlyle Group has amassed at least $2.87 billion for its latest buyout fund, which has a target of $10 billion, Reuters reports. As DealBook noted, the firm has been unusually busy as of late, striking 19 deals worth nearly $14.1 billion over the 12 months that ended in mid-August.

Carlyle's David M. Rubenstein is putting his money to good use. Last year, he donated $4.5 million for panda fertility research at the National Zoo. Over the weekend, the zoo welcomed a new baby panda into the world. Alan Beattie of The Financial Times tweeted: “Oh God - the feelgood panda story is also a feelgood private equity story. This is a black day for cynics.”

You Got ‘Einhorned'  |  David Einhorn of Greenlight Capital is known for his ability to move stocks simply by raising questions about a company's health. The Wall Street Journal measured the extent of the hedge fund manager's power:

“The nine companies where analysts and investors saw his comments as negative fell by a median of 4.9% on the same day, the analysis shows. Thirty day s later, the median decline was 13%.”

Don't Pack Away Your Gala Wear  |  J. Michael Evans, a Goldman Sachs vice chairman, and his wife, Lise, who recently upgraded their abode, are two co-chairs of an event tonight at Cipriani 42nd Street on behalf of the nonprofit New Yorkers for Children. The black-tie gala, which begins at 6:30 p.m., is to support children in foster care. Downtown at the Cipriani Wall Street, George Soros is being honored tonight by the Institute of International Education. Bloomberg News has details of the season's social calendar, featuring events with the likes of Vikram Pandit, Gary Cohn and John Paulson.

Roger McNamee, managing director and co-founder of Elevation Partners, the venture capital firm that counts Bono among its principals, is on Bloomberg TV at 6 p.m.

Ex-UBS Trader' s Personal Betting Accounts  |  A prosecutor at the trial for Kweku M. Adoboli, the former UBS trader who faces four counts of fraud and false accounting, said Mr. Adoboli had several spread-betting accounts that violated the bank's rules, Bloomberg News reports. Mr. Adoboli was said to have been in debt, with his personal bank accounts mostly overdrawn.

Resistance to a Plan to Put More Women on Boards  | 
Nine countries in the European Union have signed a letter opposing a proposed law that could penalize companies that do not allocate 40 percent of their board seats to women, The New York Times reports. The Deal Professor recently wrote about the possible benefits of such a law.

Mergers & Acquisitions '

Dole Food to Sell 2 Busine sses to Itochu for $1.7 Billion  |  Dole, the world's largest fruit company, said it would put the cash proceeds from the sale of its packaged foods and Asian fresh fruit businesses toward paring down its debt and the costs of reorganizing its struggling business.
DealBook '

Lenovo to Buy Cloud Computing Company  |  Lenovo, the personal computer maker, said on Tuesday that it would buy Stoneware for an undisclosed sum, as the frenzy for cloud-based technologies continues.
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Political Demands Could Derail Aerospace Merger  |  The governments of Britain, France, Germany and Spain are set to weigh in on the proposed merger between BAE and EADS, Reuters reports.
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New Wrinkle in Micron-Elpida Deal  |  Reuters reports: “U.S. bondholders who have been battling Elpida Memory Inc's planned sale to Micron Technology Inc revealed on Monday the bankrupt Japanese chipmaker had carried out ‘unauthorized' dealings involving its U.S. assets.”
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Google Buys Nik Software  | 
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Oracle to Buy SelectMinds, Social Recruiting Company  | 
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Chinese Company to Acquire DNA Sequencing Firm  |  Complete Genomics , a struggling DNA sequencing company in Silicon Valley, has agreed to be acquired for $117.6 million by BGI-Shenzhen, a Chinese company that operates the world's largest sequencing operation.
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Volcker Rule Said to Affect Morgan Stanley Fund  |  Reuters reports that the Volcker Rule, which limits a bank's ability to put its own capital at risk, “is causing headaches for Morgan Stanley as it prepares to raise a new multi-billion-dollar global infrastructure fund, people familiar with the situation said.”
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Examining the Ubiquity of Private Equity  |   A Q.&A. with Jason Kelly, author of “The New Tycoons: Inside the Trillion Dollar Private Equity Industry That Owns Everything.”
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Learning Tree Chief Makes Buyout Offer for Company  | 
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Massage Company to Change Hands  |  Roark Capital Partners is buying Massage Envy from Sentinel Capital Partners, Fortune reports. Financial terms were not disclosed.
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LightSquared Lenders Question a Harbinger Transaction  |  Lenders to the bankrupt wireless company said in a court filing that a $263.8 million loan the company received from Philip Falcone's Harbinger Capital Partners was actually an “equity infusion,” The Wall Street Journal reports.
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Hedge Funds Abandon European Bank Stocks  |  With returns on equity diminishing, some hedge funds are growing frustrated with European bank stocks as more patient investors, like mutual funds, are taking interest in the sector, Reuters reports.
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Elliott Management Squares Off With Lehman  |  The hedge fund Elliott M anagement, a creditor to Lehman Brothers, said Lehman's plan to sell a stake in Navigator Holdings valued the asset at too low a price, Bloomberg News reports.
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Trulia to Test I.P.O. Waters  |  The real estate listing company is set to begin trading on the New York Stock Exchange on Sept. 20.
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MegaFon Looking to Tap Demand for Russian Telecoms  |  MegaFon, a telecommunications company controlled by Alisher Usmanov, Russia's richest man, is looking to raise an estimated $3 billion, Reuters reports.
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Lenovo to Buy Cloud Computing Company

Lenovo, the personal computer maker, said on Tuesday that it would buy Stoneware, as the frenzy for cloud-based technologies continues.

Cloud-based computing, which allow users to access software and other services via the web, has been a hot area for deal-making in recent years.

In May, SAP, the German software company, bought Ariba for $4.5 billion. Oracle agreed to buy Taleo, which makers human resources software, for $1.9 billion in February, after paying $1.43 billion for RightNow Technologies last year. In 2010, Dell bought Boomi, a cloud computing start-up.

With Stoneware, Lenovo will add education and government related-services, with products like webNetwork and LanSchool.

“Adding Stoneware cloud computing into the Lenovo line up presents a significant opportunity to leverage their success, and enhance our PC Plus offerings, all to the benefit of our customers,” Peter Hortensius, a senior vice president at Lenovo said in a statement. †œWe have a history of innovation and embracing new technologies, and the talented team at Stoneware will fit in perfectly with our long-term strategy.”

The terms of the deal were not disclosed. Lenovo expects to complete the acquisition by the end of the year.

Dole Food to Sell 2 Businesses to Itochu for $1.7 Billion

TOKYO - Dole Food will sell its packaged foods and Asian fresh fruit businesses to the Japanese trading house Itochu for $1.7 billion in cash.

Dole, the world's largest fruit company, said in a news release on Monday
that it would put the cash proceeds toward paring down its debt and the costs of restructuring its struggling business.

Dole, which produces, markets and distributes fruit and vegetables, has been hit by volatile demand and lower earnings from bananas, its mainstay fruit.

The company, based in Westlake Village, California, said earlier this year that it wanted to sell its packaged food business, which includes canned fruit and fruit drinks, as well as its fresh fruit operations in Asia, as part of a companywide restructuring. Last week, the company announced that it was in advanced talks with Itochu over a deal.

The Tokyo-based Itochu, on the other hand, joins other Japanese trading houses that are taking advantage of the strong ye n and record profits to snap up companies overseas.

Dole's Asia fresh fruit business, in particular, will allow Itochu to tap into new demand from the region's growing middle class.

The deal gives Itochu, Japan's third-largest trading company, control of Dole's banana plantations and other fruit farms, canneries and processing centers in Asia, including China, the Philippines and Thailand. Itochu also will gain exclusive global rights to Dole's trademark on packaged foods, as well as fresh produce in Asia and Oceania.

Shares in Dole slipped 0.72 percent in New York to $13.70. They have gained almost 60 percent this year on its restructuring plans, share buybacks by its chairman, David H. Murdock, and anticipation of the Itochu deal.