Opening Bell: 3.2.17

Wells Fargo stares into the abyss; SEC rolls eyes at Snap shares; "Sizzler U" apparently not a reputable alma mater; and more.
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Wells Fargo Warns a Deeper Review May Uncover More Bogus Accounts (BBG)
The bank has expanded a review into how employees pitched accounts and other products to customers, looking at a broader time frame, and is now refining its methodology to identify any improper sales, the company said in an annual regulatory filing. “This work could lead to, among other things, an increase in the identified number of potentially impacted customers,” it said.

The Biggest Myths in Investing, Part 6 – Gold is a Good Portfolio Hedge (PragCap)
Within the scope of the global asset markets gold is an extraordinarily small portion at just 0.58% of all outstanding assets.¹ If an investor is seeking diversification and a portfolio that reflects the market balance of all assets then gold is a largely meaningless asset. In other words, the aggregate global asset markets simply don’t deem gold to be all that important within the scope of all outstanding assets. Said differently, a free market purist shouldn’t allocate much to gold based on the current aggregate relative market value of outstanding gold.

T Rowe Price $17bn fund reveals details of private investments (FT)
T Rowe Price’s flagship small companies fund has revealed annualised returns of nearly 35 per cent from its private investments, rebutting critics who argue that mutual funds should eschew riskier, unlisted companies.

Bet on Snap Shows Luck’s Role in Venture Business (WSJ)
When Mr. Spiegel visited Lightspeed’s office he shared internal analytics data that showed user growth exploding. The 21-year-old impressed Lightspeed’s partners with his insight that evaporating conversations meant people shared more spontaneously on Snapchat than other social networks. Fears Snapchat was used for sexting were allayed by data that showed most photos were shared while teens were in school. About two weeks after that meeting, Lightspeed struck a deal while Mr. Spiegel was on spring break in Argentina.

Exclusive: SEC advisory committee to question Snap's transparency for investors (Reuters)
For Snap, "The question becomes, since there are no common shareholders' proxy votes to do, what does that do to the level of disclosures it will have to do for annual meetings and annual reports," Kurt Schacht said in a telephone interview. "We feel it's worth asking the question of, is this a one-off novelty pump-and-dump IPO, or is this a new trend with these unicorns?" he said. If so, he said that would "a troubling race to the bottom."

Bitcoin’s “creator” races to patent technology with gambling tycoon (Reuters)
Craig Wright, the Australian computer scientist who made the Satoshi claim, has the backing of Calvin Ayre, a wealthy Canadian entrepreneur. Ayre has been indicted in the U.S. on charges of running online gambling operations that are illegal in many U.S. states – an accusation he rejects. Wright’s expertise combined with Ayre’s support make a potentially formidable force in shaping the future of bitcoin and blockchain. Wright and his associates have lodged more than 70 patent applications in Britain and have plans to file many more. The patents range from the storage of medical documents to WiFi security, and reflect Wright's deep knowledge of how bitcoin and blockchain work.

I’m Renting a Dog? (Bloomberg)
One cat lover described buying a Bengal kitten from a breeder in Jacksonville, Florida, at a sticker price of $1,700—then learning they were on the hook for 32 monthly payments of $129, or about $4,100. “They explained to me that not only was this not a loan but a lease in which I would either have to continue making these payments or return the animal,” the customer wrote in a November 2015 complaint. “Also this cat is ruining my credit score.”

What It’s Like Inside a Wall Street Executive Kitchen (Eater)
The freedom of a flexible menu allowed Johnson to dive into different territory, including cooking with Iberico pork, foie gras, truffles, and whole animals, breaking them down and using each part while focusing on serving anywhere from 30-50 people each meal. Johnson says that after 9/11, the company cut down on out-of-office lunches and brought in expert chefs to run the in-house dining. “They went after these big time-chefs who worked at these amazing places that projected the food that they wanted,” Johnson says. “I would never think that I would work at Morgan Stanley, but [it] also helped me understand the business side of the culinary world.”

Iowa Pol’s Bio Changed After ‘Sizzler U’ Discrepancy Emerges (NBC)
An Iowa lawmaker who is pushing a controversial bill that caps the number of Democrats that state universities can hire as professors claimed on a government website that he got a "business degree" from the "Forbco Management school." But State Sen. Mark Chelgren's alleged alma mater is actually a company that operated a Sizzler steak house franchise in southern California and he doesn't have a "degree," a spokesman said. “This was a management course he took when he worked for Sizzler, kind of like Hamburger University at McDonald's," Failor said. "He got a certificate."

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Westminster Hits At Goldman Sachs Bonus Plan (FT) Goldman Sachs provoked a furious reaction in Westminster after it emerged that the U.S. investment bank was mulling a plan to delay its U.K. bonus payments to take advantage of the imminent cut to the top rate of tax. John Mann, a Labour member of the Treasury select committee, criticized an "opportunistic money grab" by banks at a time of intensifying public anger against the sector. Some 10 banks had previously considered delaying bonuses until the top rate falls from 50 to 45 pence - although most have since concluded that this would be damaging. Chris Leslie, shadow Treasury minister, said banks needed to think carefully about their reputations. Fitch Warns Of US Downgrade Over Debt Fight (CNBC) In a statement Fitch said the debt ceiling was "an ineffective and potentially dangerous mechanism for enforcing fiscal discipline. It does not prevent tax and spending decisions that will incur debt issuance in excess of the ceiling while the sanction of not raising the ceilingrisks a sovereign default and renders such a threat incredible." Fitch Upbeat On Ireland (Reuters) If [Ireland's] debts could be shared out among euro zone states through the region's bailout mechanisms there could be scope for Ireland's BBB-plus rating to rise into the single-A category, according to Fitch analyst Douglas Renwick. "If there is an element of risk sharing, say perhaps through the ESM (European Stability Mechanism) over a bit of time, it could rise back to the single-A (range)," Renwick said. JPMorgan Ordered To Fix Lapses (WSJ) US regulators hit JPMorgan with four formal enforcement actions targeting lapses in risk-management and money-laundering controls, including the first sanctions in response to the bank's multibillion-dollar 2012 trading debacle. 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Bob Khuzami, Master Blaster (NYP) Robert Khuzami yesterday took aim at a Columbia University professor who chided the SEC’s head of enforcement for not suing enough high-ranking individuals at large financial institutions, choosing instead to settle with those companies...Khuzami said in a blistering 1,500-word article in the National Law Journal that the SEC has charged a total of 102 individuals associated with the credit crisis, including high-level executives at Citigroup, Credit Suisse, Bear Stearns, and Fannie Mae and Freddie Mac...It’s the second time in as many weeks that Khuzami has called out his critics by name. Just before New Year’s Eve, the Brooklyn native blasted Simon Johnson, a professor at MIT Sloan School of Management, for a New York Times blog that said Khuzami’s hire was a “mistake” because of his former ties to Deutsche Bank. Khuzami shot back in the comment section of the blog — an unusual move for a public official. 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Opening Bell: 9.8.16

Wells Fargo is in trouble; ECB stands pat; Wall Street vs Trump; Felon named Coffee charged with coffee attack on fellow inmate; and more.