Opening Bell

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.

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51 Responses to “Opening Bell: 01.15.14”

  1. Guest says:

    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. guest says:

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

  3. Guest says:

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

  4. KingCo says:

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

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

  5. Guest says:

    "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.

  6. Guest says:

    " . . . 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.

  7. guest says:

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

  8. Guest says:

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

  9. Florida House Flips says:

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

  10. guest says:

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

  11. Guest says:

    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.