Opening Bell: 8.16.16

Investors dip toes back in Iraq; Elon Musk can't top setting lofty goals, failing to achieve them; Cops say woman repeatedly kicked boyfriend in face after he refused to have sex with her; and more.
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By Heisenberg Media (Flickr: Elon Musk - The Summit 2013) [CC BY 2.0], via Wikimedia Commons

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Musk Sets Lofty Goals at Tesla, Often Falls Short (WSJ)
“I have never set a goal which I know is unrealistic, unless I have specifically said I know it’s unrealistic,” said Mr. Musk, 45 years old, in an interview. Earlier this month, he committed to boosting Tesla’s weekly output more than 50% by the end of this year compared with the first half of 2016. Few chief executives aim as high or push as hard as Mr. Musk, also the chairman and largest shareholder of Tesla, which is growing faster than General Motors Co. and Ford Motor Co. and is worth $34 billion in stock-market value. That’s about one-third of the two traditional auto makers combined. In the past five years, though, Tesla has fallen short of more than 20 projections made by Mr. Musk, ranging from car-production output to financial targets, according to an analysis by The Wall Street Journal. The company missed 10 of his stated goals by an average of nearly a year.

Tesla will have 40 rivals by 2021: Tesla bear (CNBC)
"Tesla has absolutely nothing sustainably proprietary, nothing," said Mark Spiegel of Stanphyl Capital on Monday's edition of "Closing Bell." "Yet it is losing a massive amount of money with zero direct long-range electric car competition." And soon it will have direct competition for every product it has, from charging, to Autopilot, to battery technology to cars, he said. By 2018 or 2019, Mercedes will roll out four electric cars, Porsche and Audi will both have two, and Jaguar and Bentley will have one each, Spiegel said. On the mass market end, Ford is expected to have two models; Volkswagen, five; Hyundai, two. "By 2021 every single manufacturer will have" an electric car, Spiegel said. "Tesla will go from zero direct competitors to 40 direct competitors," he said.

Some International Investors Cautiously Return to Iraq (WSJ)
After disruptive anti-corruption protests earlier this year, a degree of stability has returned to parliament. Weak oil prices that sapped its economy have staged a fragile recovery. And Iraqi forces have beaten back Islamic State to just a few pockets in the country, most recently driving them from Fallujah and Ramadi. Since then, interest in the country from serious investors has increased, said Mudher Salih, a former senior central bank official who advises Prime Minister Haider al-Abadi on financial policy. “After Fallujah and Ramadi everything changed,” he said. Part of that change is foreign capital, and deal-scouting executives are cautiously returning to Iraq and improving its business outlook.

Icahn Calls on EPA to Fix ‘Mother of All Short Squeezes’ (Bloomberg)
A surge in government-backed ethanol blending credits has billionaire investor Carl Icahn worried that independent refiners like CVR Energy Inc., in which he owns an 82 percent stake, will be bankrupted by the “rigged” marketplace. "The RIN market will cause a number of refinery bankruptcies," Icahn wrote in an Aug. 9 letter to Environmental Protection Agency administrators Gina McCarthy and Janet McCabe obtained by Bloomberg. “The domino effect of this will be that ‘big’ oil will sop up the bankrupt refineries, causing an oligopoly resulting in skyrocketing gasoline prices.”

Brazilian divers allegedly split after one kicks other out of room to have marathon sex session with canoeist (NYDN)
Ingrid Oliveira and Giovanna Pedroso won’t compete together again after 20-year-old Oliveira kicked her partner out of their Olympic Village room for an alleged late-night sex session, according to Brazilian paper O Globo. Pedroso, 16, was reportedly booted from their shared room so Oliveira could spend the night with Brazilian canoeist Pedro Goncalves. The pair finished in last place the next day in the 10m platform competition, more than 70 points behind China, and Pedroso dumped her partner soon after. “After the Olympics, I will focus on my individual,” she told O Globo. “It's good because I will not need to depend on anyone. Then I will be able to improve and evolve more.”

SEC halts trading of Neuromama on 'potentially manipulative' transactions (Reuters)
The U.S. Securities and Exchange Commission (SEC) said on Monday it had halted trading in shares of Neuromama Ltd (NERO.PK) because of certain concerns including "potentially manipulative" transactions. The SEC also cited "the identity of the people in charge of the company", as well as the "accuracy and adequacy of information in the marketplace" as reasons for halting the stock. The company, which distributes inflatable games and water slides, has a market value of about $35 billion.

Buffett’s Berkshire Hathaway Increases Bet on Apple (WSJ)
Warren Buffett's Berkshire Hathaway sharply increased its bet on Apple Inc. during the second quarter, bringing its stake in the iPhone maker to roughly $1.5 billion.

Central Banks Could Be This Market’s Pets.com (WSJ)
The theoretical justification for higher prices now, as it was then, comes from the dividend discount model. This states that the value of a stock is the total of all future dividends, discounted back into today’s money. The bubble mentality of the dot-com era made earnings forecasts all but redundant, but the hope was for big profits one day, which eventually translate into dividends to justify the price. Something radically different is under way at the moment. Pessimism has depressed bond yields, reducing the discount rate and so making even fairly stagnant future profits look more attractive in today’s money. Higher prices are justified, without needing much in the way of earnings growth.

Cops: Woman, 34, Repeatedly Kicked Boyfriend In Face After He Refused To Have Sex With Her (TSG)
According to an arrest affidavit, Jennifer Furguson, 34, sought a 6:30 AM tryst Wednesday with her beau inside the couple’s Port St. Lucie residence. The victim, who has been in a relationship with Furguson for two years, told police that “Jennifer became upset at him when he refused to have sex with her this morning.” After being rejected, Furguson began kicking her boyfriend in the face “while he was laying on the bed,” investigators charge. Responding officers noted that the man had “significant swelling to his right cheek bone and redness to his left cheek bone.”

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Opening Bell: 01.03.13

Fresh Budget Fights Brewing (WSJ) If Congress doesn't do more in the coming months, Moody's warned, the company could follow Standard & Poor's in downgrading U.S. debt. "Further measures that bring about a downward debt trajectory over the medium term are likely to be needed to support the AAA rating," Moody's said Wednesday. But the battles on how to do that are far from over. Republicans say any further deficit reduction or legislation to avoid across-the-board spending cuts should come from reducing spending. President Obama and many Democrats advocate a combination of tax increases and spending cuts. The most serious skirmish will arrive toward the end of February, when the U.S. Treasury is expected to be unable to pay all the government's bills unless Congress boosts the federal borrowing limit. Then on March 1, the across-the-board spending cuts of the fiscal cliff, deferred in this week's deal, are scheduled to begin slicing into military and domestic programs. And on March 27, a government shutdown looms unless Congress approves funding for government operations for the remainder of the fiscal year, which ends Sept. 30. CEOs Pan Fiscal Cliff Deal, Vow to Continue Debt Fight (Reuters) "I think this deal's a disaster," said Peter Huntsman, chief executive of chemical producer Huntsman Corp. "We're just living in a fantasy land. We're borrowing more and more money. This did absolutely nothing to address the fundamental issue of the debt cliff." Former Wells Fargo CEO Dick Kovacevich said the agreement confirms that Washington and both parties are totally out of control. "I think it's a joke," Kovacevich said of the deal. "It's stunning to me that after working on this for months and supposedly really getting to work in the last 30 days that this is what you come up with." Obama’s Warning to Boehner Started Road to Budget Plan (Bloomberg) President Barack Obama had a warning for John Boehner at a Dec. 13 White House meeting: Stop opposing higher tax rates for top earners, or the president would dedicate his second term to blaming Republicans for a global recession. The next day, the House speaker called the president and said he was open to a tax-rate increase on annual income of more than $1 million...While the budget deal Obama and Boehner were negotiating fell apart, the speaker’s concession on tax rates ultimately allowed Vice President Joe Biden and Senate Minority Leader Mitch McConnell, a Kentucky Republican, to craft the last-minute plan Congress passed Jan. 1. Nouriel Roubini: US Will Soon 'Get Messy' Again (CNBC) "It won't be long before there is another crisis. Two months, in fact." Pershing to Take 'Passive Shareholder' Role in General Growth (WSJ) Pershing Square Capital Management LP agreed to sell $271.9 million in General Growth Properties warrants to Brookfield Asset Management Inc., as part of a deal between the mall owner's two biggest shareholders that would resolve their recent disputes and see Pershing become a passive shareholder. Brookfield, in turn, offered to sell the warrants, which represent the right to acquire 18.4 million shares of General Growth stock, back to General Growth for the same purchase price. Pershing also agreed to limit its ownership stake in General Growth to no more than 9.9% and intends to become a passive shareholder. Brookfield agreed to limit its ownership in General Growth to 45%. Bank Of Canada won’t discuss melting plastic bills, says national security behind silence (NP) Disclosing details of behind-the-scenes discussions about tales of melting banknotes could endanger national security or international relations, says Canada’s central bank. In response to a formal request from The Canadian Press, the Bank Of Canada released 134 pages of internal records — almost completely blanked out — concerning allegations its new polymer bills melted in the scorching summer sun. The bank began issuing $100 polymer banknotes in late 2011, saying they were harder to counterfeit than paper notes and would last much longer. Unconfirmed reports of cooked currency emerged in July when a Kelowna, B.C., bank teller said she had heard of cases in which several bills had melted together inside a car. Soon after, Mona Billard of Cambridge, Ont., reported that she had returned eight plastic bills in January, after her son stashed his $800 Christmas bonus in a tin can and hid it near a baseboard heater. When he retrieved them the next day to make a deposit, the $100 banknotes had shriveled and melted. Ms. Billard exchanged clean bills for the shrunken, unusable ones. “The leather couch is up against the baseboard heater, it doesn’t melt,” she said. “The kids’ toys are back there, they don’t melt.” The Bank of Canada will reimburse damaged notes, but only if they clear an examination by an Ottawa laboratory. Paulson&Co Added To Abacus Suit Against Goldman (Bloomberg) Paulson & Co. was named as a defendant in a proposed revised lawsuit by ACA Financial Guaranty Corp. against Goldman Sachs over a collateralized debt obligation called Abacus. Paulson conspired with Goldman Sachs to deceive ACA Financial, which provided financial guaranty insurance for the deal, ACA Financial said in papers filed yesterday in Manhattan. Private Sector Added 215,000 Jobs Last Month (WSJ) Economists surveyed by Dow Jones Newswires expected ADP to report a gain of 150,000 private jobs. Preet Bharara and other financial heavyweights opposing Paul Singer's attempt to get Argentina to pay debt (NYP) US Attorney Preet Bharara and BlackRock CEO Larry Fink are among the latest bold-faced names to oppose Singer’s attempt to get Argentina to pay him and others $1.3 billion on defaulted debt. Singer, the hedge fund billionaire who runs Elliott Management, is among the 8 percent of Argentina debtholders who refused to accept a 70 percent haircut following a 2001 default by the embattled South American country. Singer inched closer to winning the epic legal showdown in November when a federal judge ruled Argentina could not pay Fink’s BlackRock or other holders of the reorganized debt without putting money in escrow for Singer’s band of investors. An appeals court slowed Singer’s victory parade but refused to set aside the judge’s order. Now, Bharara, Fink’s $3.67 trillion bond firm and others are urging the appeals court to throw the case out. Basel Becomes Babel as Conflicting Rules Undermine Safety (Bloomberg) While higher capital requirements, curbs on banks trading with their own money and other rules have reduced risk, they have magnified the complexity of supervision, according to two dozen regulators, bankers and analysts interviewed by Bloomberg News. Even if the new regulations can be enforced, they don’t go far enough to ensure safety, said Robert Jenkins, a member of the Bank of England’s financial policy committee. Cops: Woman, 50, Battered Boyfriend, 32, Because Six Came Before Nine (TSG) Jennie Scott, 50, was booked into the Manatee County lockup on a misdemeanor charge stemming from the 11 PM encounter in the Palmetto bedroom of Jilberto Deleon, 32. Scott has dated Deleon “for the last 5 years on and off,” according to a sheriff’s report. Deputies were summoned to Deleon’s home by a witness who heard the couple arguing and saw Scott atop Deleon “punching and scratching him.” She also allegedly struck Deleon with a stick and threatened to hit him with a wrench before the tool was taken from her hand by the witness. When questioned by a cop, Scott explained that she and Deleon “were giving each other oral pleasure in the bedroom” when Deleon “finished first and stopped pleasuring her.” Scott added that she “became upset and they began arguing.” A deputy noted that Scott said that she was also mad at Deleon because she had “heard [him] having sex with another woman over the phone earlier in the day.” Scott struggled with deputies before being placed in a police cruiser, where she kicked a window until being warned that she would be maced unless she stopped.