Opening Bell: 1.6.17

Lean times ahead for Morgan Stanley traders; Jesse Livtak's “used car” defense; love and betrayal at Snapchat; and more.
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Morgan Stanley Said to Cut Bonus Pool for Equities Traders (BBG)

Morgan Stanley, Wall Street’s biggest stock-trading firm by revenue, is cutting its global bonus pool for the equities division by as much as 4 percent after the industry’s results flagged last year, according to people with knowledge of the plans. The firm, which is set to pay annual bonuses to employees next month, has been fine-tuning calculations for pay packages since November.

Here’s How Closely Donald Trump’s Pick for SEC Chair Is Tied to Goldman Sachs (Fortune)

Like many of Trump's other nominees and advisor picks, Clayton has a history with Goldman Sachs. He has advised the bank on how to deal with government and regulation since at least 2002. (He is also married to Gretchen Butler Clayton, a Goldman wealth manager of 10 years, as Bloomberg reports.) Most notably, Clayton advised Goldman Sachs on two separate incidents related to the 2007-09 financial crisis.

These Are The Top M&A Boutiques. This Is How Much They Pay (EFC)

Boutique investment banks have generally had a spectacular 2016. While the M&A fee pool has generally declined on a stellar 2015, boutiques have been grabbing a larger market share and profits have been on the up. The good thing about working for a boutique investment bank is that they’re not (or at least, not yet) constrained by pay rules that prevent larger institutions from paying big bonuses. If boutiques have a good year, their staff benefit and very often it’s a small pool of people seeing big pay days.

Stop Worrying About Trump’s Tweets (FT Alphaville)

If you own some code that does high frequency trading, then, based on the evidence so far, there is only one sensible response when Trump tweets about a company: Buy. If you don’t own some code that does high frequency trading, then stop worrying and spend more time with your friends and family.

Japan Rallies To Defend Toyota After Trump Warning (FT)

“Toyota is responsible for large employment at US plants such as in Kentucky. It’s questionable whether the new US president has a grasp of how many vehicles Toyota builds in the US,” said Taro Aso, Japan’s finance minister.

Trump’s Debts Are Widely Held on Wall Street, Creating New Potential Conflicts (WSJ)

Hundreds of millions of dollars of debt attached to Mr. Trump’s properties, some of them backed by Mr. Trump’s personal guarantee, were packaged into securities and sold to investors over the past five years. Mr. Trump has previously disclosed that his businesses owe at least $315 million to 10 companies. According to the Journal’s analysis, Trump businesses’ debts are held by more than 150 institutions. They bought the debt after it was sliced up and repackaged into bonds—a process known as securitization, which has been used for more than $1 billion of debt connected to Mr. Trump’s companies.

Trader’s Lawyer Defends Him With ‘Used Car Salesmen’ Comparison (NYP)

The deceptive practices used by Wall Street bond traders are no worse than the ones used by “your local used car salesmen,” the lawyer for former Jefferies Group managing director Jesse Litvak told a federal court jury here on Thursday. Litvik stands accused of lying to customers for two years about how much he paid for bonds.

A Citigroup Debt Strategist Created A Scary Looking Clock, And It Looks Like Time Is Running Out (BI)

Net debt has been increasing, while growth rates for earnings before interest, taxes, depreciation and amortization are negative. That would normally suggest that the bond market is in "bubble burst" territory, which is normally bad for the credit and stock market. In fact, emerging markets bonds and high-yield debt are already past this point.

An Ex-Employee’s Lawsuit Against Snapchat Reads Like A Dramatic Romance Novel (Qz)

A military hero, a spurned suitor, a tale of revenge and betrayal. No, it’s not the latest Fabio-covered paperback. It’s a lawsuit filed against Snapchat in Los Angeles earlier this week. The lawsuit alleges that Snapchat fired a former employee, Anthony Pompliano, after just three weeks of work because he refused to participate in Snapchat’s “institutional pandemic” of faking its growth numbers.

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Goldman is losing ground to Morgan Stanley; John Cryan sees a hard Brexit coming; doctors found 27 contact lenses in some lady's eye; and more.

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Morgan Stanley traders suffering the doldrums alongside BofA, JPMorgan; De Blasio gives Wells Fargo the boot; Mr. Met gives fan the finger; and more.