Opening Bell: 01.15.14

How legal marijuana could be the next great American industry (CNBC)
For now, mass cannabis production and scalable business models aren’t as vigorous as they could be because marijuana remains illegal under federal law. Banks and credit card companies are prohibited from processing pot business transactions, according to federal rules. But working within state guidelines, scrappy entrepreneurs are moving forward with ambitious cannabis business strategies. They see potential for big sales and profits—especially if more mid-sized businesses can transition to large, national brands. Wealthy individual investors already are tapping private equity firms for a bite of the potentially lucrative marijuana business. “Our investors are from the far left and the far right,” said Brendan Kennedy, chief executive of Privateer Holdings, a cannabis-focused private equity firm. “There’s old money and new money. You put them in a room and they wouldn’t agree on anything else but this issue,” Kennedy said. Seattle-based Privateer also acquired, which offers online reviews of cannabis strains and dispensaries.

Fed Eyes Banks’ Commodity Activities (WSJ)
The Fed, which has been studying the issue for at least two years, said it wants to examine “all aspects” of bank-owned commodity businesses, including “potential conflicts of interest” at the banks and the risks that commodity subsidiaries might pose to financial stability. The regulator said it will give banks and other parties two months to submit input on how it should proceed before considering “what further action, including a rulemaking, is warranted.”

Large Hong Kong Hedge Funds Have Best Year Since Inception (Bloomberg)
The Myriad Opportunities Master Fund, a $2.4 billion multistrategy fund, returned about 20 percent in 2013, said two people with knowledge of the performance. Azentus’s about $840 million Asia-focused global multistrategy fund rose 16.4 percent, said a person familiar with the return. The people asked not to be identified because the information is private.

U.S. Senate hearing set to press for quicker commodity bank curbs (Reuters)
n a preliminary notice seeking public comment on possible new curbs, the Fed cited real-world risks including the BP Gulf oil spill and last year’s Quebec oil train disaster as examples of the multibillion-dollar catastrophes that banks face by being involved in the risky, messy world of commodities. The notice also suggested possible remedies, including limits on assets and revenues as well as curbs on trade of some types of commodities, and posed questions to draw public input.

Kanye West sues COINYE, themed digital currency, over trademark infringement (NYDN)
The superstar rapper and wealthy music mogul filed a trademark infringement lawsuit Tuesday against the creators of a humorous new Kanye West-themed digital currency called “COINYE” that launched last week.
The logo for the currency, which is bought and sold over the Internet, features a cartoon version of West wearing his signature “shutter shades.” “Defendants have willfully and admittedly traded upon the goodwill and notoriety of Kanye West, one of the most famous entertainers and brand names in the world,” claims the suit filed in Manhattan federal court, which seeks unspecified damages. The suit refers to COINYE as a “crypto-currency” because it exists only as computer code, not in any physical form. Bitcoin is the most well-known crypto-currency. “In interviews with the press, defendants brazenly admit that they adopted the marks COINYE WEST, COINYE and COYE to directly associate their newly minted crypto-currency with Mr. West,” the suit states. The “College Dropout” rapper, who had a baby daughter with fiancée Kim Kardashian last year, claims the COINYE creators are damaging his brand. “With each day that passes, Mr. West’s reputation is irreparably harmed … Consumers are likely to mistakenly believe that Mr. West is the source of these digital coins,” the suit alleges.

World Bank Is Expecting Widespread (if Still Possibly Turbulent) Growth for 2014 (NYT)
After years of recession, financial crisis, fiscal wars and a patchwork recovery, there are relatively few dark clouds on the horizon for the global economy. That is the conclusion of the World Bank’s latest global growth forecast, released on Tuesday. The bank’s economists expect growth over all to increase from 2.4 percent last year to 3.2 percent in 2014, and to maintain that level for the next two years. “The performance of advanced economies is gaining momentum, and this should support stronger growth in developing countries,” Jim Yong Kim, the president of the World Bank, said in a statement.

Regulators at Odds on Reining In China’s Shadow Lending (WSJ)
China’s effort to rein in runaway credit is being hampered by infighting between the central bank and the nation’s banking regulator, say officials at both institutions, with the two agencies sparring especially over how hard to press so-called shadow bankers. The officials say that the People’s Bank of China, concerned about banks finding ways to move loans off their books, has been frustrated at what it sees as the unwillingness of the China Banking Regulatory Commission to toughen regulation of banks’ dealings with shadow lenders, an array of formal and informal institutions creating credit outside the formal bank channels.

Hong Kong Said to Evaluate Safeguard From Market Plunges (Bloomberg)
A committee has been formed by the Hong Kong-based bourse and is in the early stages of its evaluation, said the person, who asked not to be named because the matter is private. No decision has been made on introducing the curbs, the person said. Hong Kong Exchanges hasn’t reached any conclusions on circuit breakers, said Lorraine Chan, an exchange spokeswoman who declined to comment on whether a committee was formed.

GM to pay first quarterly dividend in almost six years (Reuters)
The No. 1 U.S. automaker, which last paid a dividend in June 2008 before it moved to save money during the U.S. recession, said it will pay shareholders a quarterly dividend of 30 cents a share, payable on March 28 to shareholders of record on March 18. In 2008, its quarterly dividend was 25 cents a share.

Sex making you smarter one tryst at a time: study (NYP)
New research has found that having sex can improve mental performance and increase neurogenesis (the production of new neurons) in the part of the brain where long term memories are formed, the hippocampus. Scientists at the University of Maryland found that middle-aged rats who had sex showed signs of improved cognitive function and “hippocampal” function, reports The Atlantic…But can this theory work in reverse? Do smarter people have more sex? Unfortunately, the answer is “no”. In fact, smarter teenagers tend to start having sex later in life. Having a high working memory decreases the likelihood of an early adolescent sexual debut, according to a 2012 study by researchers at the University of Pennsylvania.

51 comments (hidden to protect delicate sensibilities)
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Comments (51)

  1. Posted by Guest | January 15, 2014 at 7:28 AM

    Only CNBC could come up with such a ridiculous hypothesis about the next, great, American industry. I give credit to FBN for not taking the sensational bait.

  2. Posted by guest | January 15, 2014 at 7:30 AM

    How do we get Coinye West to join Shia in giving up his celebrity status?

  3. Posted by Guest | January 15, 2014 at 8:06 AM

    Flavor? If I wanted flavor, if would suck my own dick.

  4. Posted by quant me maybe... | January 15, 2014 at 8:07 AM

    Autocorrect failure or need to get that first cup?

  5. Posted by Guest | January 15, 2014 at 8:18 AM

    Sorry, I meant 'flavour'….

  6. Posted by KingCo | January 15, 2014 at 8:43 AM

    "…features a cartoon version of West wearing his signature “shutter shades.”

    How would a cartoon version of Kanye differ from, say, Kanye?

  7. Posted by Guest | January 15, 2014 at 8:45 AM

    "Do smarter people have more sex? Unfortunately, the answer is “no”. In fact, smarter teenagers tend to start having sex later in life."

    Please tell me tax dollars didn't support research with the shocking finding that nerds don't get any until they make some coin.

  8. Posted by Guest | January 15, 2014 at 9:05 AM

    " . . . Mr. West’s reputation is irreparably harmed . . . "

    Oh, come on. I've heard a lot of ridiculous things from lawyers, but the insinuation that Kanye West has any reputation left worth saving just about takes the prize.

  9. Posted by Cryptocurrency MD | January 15, 2014 at 9:18 AM

    Query whether they'll get some faster by making Bitcoin or Coinye?

  10. Posted by SMU Secure | January 15, 2014 at 9:25 AM

    Plus if they are so smart, how come they don't know that using Axe bodyspray gets you laid.

  11. Posted by guest | January 15, 2014 at 9:35 AM

    nice to see gm declaring a dividend a month after the government exited their stake for a $10b loss to taxpayers

  12. Posted by Gerp | January 15, 2014 at 9:40 AM

    herp derp derp herp

  13. Posted by Guest! | January 15, 2014 at 10:04 AM

    You do better to get a small well prepared meal served by a scantly dressed french maid than you do getting a side of beef served by Buster

  14. Posted by Guest | January 15, 2014 at 10:15 AM

    Quite possibly the best parody ever on Dealbreaker.

    well done

  15. Posted by Jon Corzine | January 15, 2014 at 10:17 AM

    Hope you didn't spend alot of time coming up with that comment…

  16. Posted by Guest | January 15, 2014 at 10:38 AM

    Overall the TARP funds have been returned with a $9B surplus.

    Yes GM was a loss – portfolios are like that. But I imagine every holding in your portfolio is a winner, right?

    – Guy who likes his partisan grousing backed up by facts and context.

  17. Posted by Guest | January 15, 2014 at 10:46 AM

    Have we actually traveled in time 1 year? Does Dealbreaker possess a flux capacitor?

  18. Posted by Florida House Flips | January 15, 2014 at 11:14 AM

    From time to time I accidentally date my checks with "2008" for some reason.

  19. Posted by Hobbes | January 15, 2014 at 11:15 AM

    "With each day that passes, Mr. West’s reputation is irreparably harmed "

    More like every time he opens his mouth,

  20. Posted by NFLPA | January 15, 2014 at 11:32 AM

    Most Coinye alternative currencies are bankrupt or in prison after 5 years.

  21. Posted by End game | January 15, 2014 at 11:34 AM

    This is the first society to actively pursue dysgenic policies. Smart people less children, One dude bangs out 18 bastards, doesn't support any of them. The rest of society has to prevent them starving in the streets for moral and hygenic reasons.


  22. Posted by guest | January 15, 2014 at 11:35 AM

    Thousands of animals on this planet and the scientist chose middle aged mice to have sex with. Nice?

  23. Posted by Quackery | January 15, 2014 at 11:37 AM

    This wasn't a speculative portfolio that Hank Paulson put together.

    This was ad hoc desperation play stuff, which had a kind of self determinative aspect to it.

    I social science you can never really know whether an alternative may have been more fruitful ultimately, though I doubt it in this case.

  24. Posted by Wire out | January 15, 2014 at 11:38 AM

    That's cause you actually still use checks..

  25. Posted by Sales Trading | January 15, 2014 at 11:39 AM

    Hows Maria doin over there.

    She working her ass off ?

  26. Posted by Rebecca M. | January 15, 2014 at 11:40 AM

    you need to check your address bar, this isn't zerohedge.

  27. Posted by Rebecca M. | January 15, 2014 at 11:41 AM

    Masturbation does end with orgasms.

  28. Posted by Rebecca M. | January 15, 2014 at 11:44 AM

    Shia Labouf is furiously dialing Brad Rose for representation

  29. Posted by Guest | January 15, 2014 at 11:54 AM

    Agreed, was a series of desperate Hail Mary passes, not a real "portfolio". Given that it's nothing short of a miracle that taxpayers got ANY return at all. But we did – grousing about GM notwithstanding.

  30. Posted by guest | January 15, 2014 at 12:04 PM

    I've been doing it wrong all these years!

  31. Posted by Bartoma | January 15, 2014 at 12:23 PM

    Just a fact. Not every single thing has to be jokey all the time.

    It's not political, but what is actually occurring.

  32. Posted by Guest | January 15, 2014 at 12:34 PM

    Serious comment (sorry). The marijuana industry may have some growth prospects, but keep in mind that much of the legislation was pushed by local growers, and contains a lot of regulatory red tape specifically designed to make participating difficult for corporate entities. I'm sure limitations on the amount that can be grown or sold were presented as being "for the kids" (because kids are safer when pot is only being bought or sold in 1 oz. increments, of course), but they're really there to protect local growers from Big Ag.

    That may sound like good news for startups who will face less competition from big players, but at the same time it means that there's only limited upside to the business. The same rules that keep Big Ag out will also keep startups from becoming the next corporate growth stock. So while the stock prices are taking off and CNBC is sending reporters out for the most coveted reporting job aside from covering the women's fashion industry, I don't see investments in the area going anywhere in the long term until the rules change. I'm sure it's a great time to be a small-time local grower or a weed merchandise retailer, but don't get too excited about the business expanding to a larger scale than that.

  33. Posted by Guest | January 15, 2014 at 12:42 PM

    It's high time someone addressed that issue.

  34. Posted by bleghboy | January 15, 2014 at 12:57 PM

    I know he apologized for being serious, but I can't believe the commentariat will take kindly to his being so blunt in this joint.

  35. Posted by Guest | January 15, 2014 at 1:05 PM

    My 'rents will be starting operations in WA soon (granted license approval).

    Really banking on them making "fuck you" money, so I can quit my job and follow my dreams of working at the fish market in Seattle (I've loved throwing fish since I was a boy), giving local cannabis tours and some dancing on the side.

  36. Posted by Guest5 | January 15, 2014 at 1:19 PM

    Ever heard about opportunity cost? If i had invested a ton of money in distressed debt and equity in 2009 I certainly would expect a much higher return than whatever joke of an IRR the government got. I'm not saying that the government should have played hardball with the bailed out institutions, but they could have gotten significantly better terms and returns.

  37. Posted by Guest | January 15, 2014 at 1:25 PM

    So this industry may not be the pot of gold some are imagining?

  38. Posted by Guest | January 15, 2014 at 1:27 PM

    Perhaps joint ventures are the way forward?

  39. Posted by Guest | January 15, 2014 at 1:31 PM

    No, I am completely unfamiliar with this arcane concept of "opportunity cost".

    Please explain it, oh wizard of finance.

  40. Posted by Jon Shaznam | January 15, 2014 at 1:33 PM

    I wanna do for furniture what Laura Ashley did for fabrics

  41. Posted by Guest | January 15, 2014 at 2:09 PM

    The story would have been better with some graffix.

    Has the Chamber of Commerce bonged this movement or cleared it?

  42. Posted by Guest | January 15, 2014 at 2:26 PM

    Oh no, weirdly dystopic comments with a hint of eugenics about them aren't political. No sir.

  43. Posted by Guest | January 15, 2014 at 2:30 PM

    Why don't you guys get back to cracking books instead of commenting on relative philosophies before coming to me for an internship.

  44. Posted by Guest | January 15, 2014 at 2:33 PM

    Let me know how you feel about this after you graduate from college and hit Excel 80 hours a week if you're lucky, 40 hours if you're not so much.

  45. Posted by SMU Senior | January 15, 2014 at 2:44 PM

    Who's Excel? She hot?

  46. Posted by Fixed | January 15, 2014 at 2:48 PM

    Why don't you guys get back to cracking stick instead of commenting on relative philosophies before coming to me for an internship.

  47. Posted by Guest | January 15, 2014 at 2:51 PM

    It's the new drug. Krokodil is sooooo 2013. Once you get Excel in the vein, you begin cracking keyboard shortcuts until your fingers bleed. Then after about 12 hours you come off of it and have to shower to do it again. A kid died of it last year in London, caused a seizure.

  48. Posted by Guest | January 15, 2014 at 3:30 PM


    MD, John Thomas Financial

  49. Posted by John Glaad | January 15, 2014 at 4:35 PM

    Eugenics was advanced by very left labor leaders initially who perceived correctly that things like good health, intelligence, behavioral restraint had a genetic component and are socially valuable. That planning as in all fields would help to relieve what was then a very real dystopian plight of many working people in factory and slums.

    Modern day actors have attempted to obfuscate and suppress this, but it is modern history and voluminously well documented.

  50. Posted by J. Harbaugh | January 15, 2014 at 4:43 PM

    Seahawks chug jizz.

  51. Posted by Guest | January 15, 2014 at 4:47 PM

    How do you think we win so much? Mmmm… protein.

    -Pete Carroll