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Opening Bell: 4.20.17

Paul Singer put on blast for "legendary" partying; Goldman ditches the dollar trade; a drive-through weed dispensary; and more.
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Ousted Arconic CEO Sent a Vague Threat to Activist Hedge-Fund Boss (WSJ)
The letter, sent last week to Elliott Management Corp., referenced the alleged partying of Elliott’s president, Paul Singer, at the 2006 World Cup in Germany, Mr. Kleinfeld’s home country. Mr. Kleinfeld wrote, in sometimes imperfect English, that while the two had never met, he had heard stories from friends in Germany about what the letter called Mr. Singer’s “legendary” conduct during and after several matches. The letter alludes to the Wall Street magnate singing “Singing in the Rain” in a fountain. Mr. Kleinfeld added that he had been looking for an Indian headdress to send to Mr. Singer. It isn’t clear what he meant by that.

paul singer

The Bond Market Prefers Dictators to Democracies (BBG)
"Investors typically view the bonds of an autocratic regime very negatively and assign a very high default probability," said Victor Fu, the director of emerging-market sovereign strategy at Stifel Nicolaus & Co. But "in an autocratic regime, the government remaining in power is considered more important than people’s welfare. Since a bond default likely will raise the risks for the government to be thrown out, the ruling party will do its best to prevent a credit event."

Goldman Sachs just abandoned one of its ‘top trades of 2017’ (MarketWatch)
The reversal essentially amounts to a mea culpa for the bank’s sell-side strategy department, which has repeatedly found itself wrong-footed on the dollar in recent years. After accurately anticipating that the buck would rise in 2013, The investment bank’s former top currency strategist Thomas Stolper reversed his view in December of that year, before leaving the bank two months later. Clients who took his advice missed out on one of the most dramatic rallies in the greenback’s history.

Bank Regulator Rips Its Own Supervision of Wells Fargo Sales Practices (WSJ)
The OCC report amounts to a detailed critique of alleged failures at the agency, the primary regulator of Wells Fargo. It found that supervisors were aware of complaints about the sales program, including a meeting with a senior Wells Fargo executive in January 2010 at which they inquired about 700 whistleblower complaints “related to the gaming of incentive plans.”

The Other Side (Irrelevant Investor)
Since 1970, there have been 17 days where the S&P 500 gained at least 5%, and 21 where it lost more than 5%. Therefore, it’s more likely that a coin flipper would have missed big down days than up days. If missing the 25 best days took your returns from a 10 to a 4, then missing the 25 worst days took your returns from a 10 to a 25.

First U.S. drive-through marijuana store to open in Colorado (Reuters)
“You actually drive into the building," Mark Smith, chief executive of Tumbleweed, the company that owns the new store and six other pot shops in the state, said. "A door opens up and you drive the car into the building and then the door closes behind you, like in a Jiffy Lube. So in essence, you’re inside the dispensary, but in a vehicle.”

Silicon Valley’s $400 Juicer May Be Feeling the Squeeze (BBG)
Doug Evans, the company’s founder, would compare himself with Steve Jobs in his pursuit of juicing perfection. He declared that his juice press wields four tons of force—“enough to lift two Teslas,” he said. Google’s venture capital arm and other backers poured about $120 million into the startup. Juicero sells the machine for $400, plus the cost of individual juice packs delivered weekly. Tech blogs have dubbed it a “Keurig for juice.” But after the product hit the market, some investors were surprised to discover a much cheaper alternative: You can squeeze the Juicero bags with your bare hands.

JPMorgan Said to Plan Tripling Size of New York Technology Hub (BBG)
The firm’s West Side hub, which opened in late 2015, caters to millennials by mimicking startup culture, with foosball tables, a game room, industrial decor and fridges stocked with sodas and snacks.

Frank and Steven’s Excellent Corporate-Raiding Adventure (Atlantic)
Public markets, he said, enabled Tejon Ranch to operate under much less short-term pressure, and to take a longer-term perspective. We were flabbergasted: Many companies go private or stay private to avoid the short-term pressure that public markets can create. But the fact is, for companies the size of Tejon Ranch—and there are thousands of them, filling the portfolios of mutual funds and pension funds, even though most investors have never heard their name—Bielli is probably right. Because so many investors are passive today, most CEOs can relax, even if their performance is mediocre.

Florida tennis match interrupted by copulating couple's sexual sounds (UPI)
The Tuesday night match between Frances Tiafoe and Mitchell Krueger, part of the ATP Challenger Tour, came to a brief stop when the court was filled with the sounds of enthusiastic lovemaking. "It can't be that good," an amused Tiafoe shouted from the court. Video from the event shows a mother in the stands instructing her young son to cover his ears.

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Fed's Fisher Pins Slow Growth on Politicians (WSJ) Federal Reserve Bank of Dallas President Richard Fisher on Wednesday blamed both major U.S. political parties for a "horrid" political climate in Washington, and said monetary policy alone can't drive the economy. "We provided the fuel for economic recovery," Mr. Fisher said of the central bank, describing the Fed's stimulus as "very high-octane, dirt-cheap gasoline." But he said that neither Republican nor Democratic politicians in Washington have done their part by putting policies in place that spur the private sector "to take the cheap fuel that we have provided and step on the accelerator." Banks Said to Weigh Defying Fed With Dividend Disclosures (Bloomberg) The largest U.S. banks are weighing whether to disregard a Federal Reserve request and announce their dividend plans shortly after the central bank’s stress tests are released, people with knowledge of the process said. The Fed has asked 18 firms, including JPMorgan and Goldman Sachs, to wait until next week, even though the lenders will get preliminary word today about whether their capital plans were approved. Bank executives are concerned that investors could be confused and are considering whether securities laws may require prompt disclosure of their plans for dividends and share repurchases, the people said. Paulson Gold Fund Down 18% as Metal’s Slump Foils Rebound (Bloomberg) John Paulson posted an 18 percent decline in his Gold Fund last month as a slump in the metal, after more than a decade of gains, undermined efforts by the billionaire hedge-fund manager to rebound from two years of losses in some strategies. The $900 million Gold Fund, which invests in bullion- related equities and derivatives, is down 26 percent this year, Paulson & Co. said yesterday in a client update obtained by Bloomberg News. The firm’s Advantage funds also fell in February after the metal and related stocks weakened as signs of economic optimism curbed gold demand. “Despite the volatility and drawdown of our gold equity positions, we believe in the long-term outlook for these positions as quantitative easing programs continue around the world, credit expands in the United States, and gold equities continue to trade at a significant discount” to historical average valuations, the hedge fund said in a letter sent yesterday to investors, which was obtained by Bloomberg News. Carl Icahn Rachets Up Dell Fight (WSJ) In a letter released by Dell Thursday, Mr. Icahn said he has a "substantial" position in the company, and asked Dell to pay a per-share dividend of $9 if the deal is voted down by shareholders. He said that by his calculations, that transaction would be superior to the current going-private offer, citing a "stub" value of $13.81 a share which, combined with the special dividend, represents a 67% premium to the current $13.65 per-share offer price. Dell 'Welcomes' Carl Icahn to Go-Shop Process (CNBC) Dell on Thursday said it welcomed Carl Icahn, who has built up a 100 million share stake in the company, and other interested parties as the computer maker seeks to go private. The special committee appointed by the board said it was conducting a "robust go-shop process" and was looking at other alternatives after a $24.4 billion buyout led by founder Michael Dell faced opposition from some shareholders. Bad-News Bears Crash The Party (WSJ) For all their conviction, the bears realize it may be awhile before their dark predictions come true. "Unfortunately, I am bearish and I have been wrong," said Samer Nsouli, chief investment officer at Lyford Group International, a hedge fund, who argues that recent weakness in copper and oil is a portent of a global slowdown. "Make no mistake, it will end in tears. The eternal question is when." Lions Maul Two To Death In Kariba (Herald) Two people were yesterday mauled to death by lions in Mahombekombe suburb in the resort town of Kariba. Sources say the man only identified as Musinje and the woman Sharai Mawera, were attacked while spending time in a bushy area with the man managing to escape, leaving the woman behind. The man went on to report the case to police who, with the assistance of officers from the Zimbabwe Parks and Wildlife Management Authority, went in search of the lions. During the search they found an arm belonging to a man with investigations pointing to the lions having made a kill the previous night. That, the sources say, could have been the reason the lions did not completely eat the woman. BofA Times An Options Trade Well (WSJ) Bank of America's trading desk last June purchased options to buy 150,000 shares of Constellation Brands, an aggressive wager that the wine-and-beer seller's shares would rise, according to a Wall Street Journal analysis of options-market data and of quarterly regulatory filings made by institutional investors. The trade helped push the volume in thinly traded Constellation options that day to more than 13 times the previous 30 days' daily average, the options data show. A week later, Constellation announced a pact to buy a Mexican beer maker out of a joint venture that imports Corona Extra and other beers into the U.S. market. Bank of America led a duo of banks that financed the $1.85 billion deal. Constellation shares soared 24% on June 29, the day the deal was made public, and Bank of America generated an estimated paper profit of more than $1 million from the options trading, the options-market data indicate. China Imitates Singer (NYP) Paul Singer’s battle with Argentina over defaulted debt is beginning to ripple through the bond world. Creditors looking to force deadbeat countries to pay up are turning to the controversial legal argument Singer used to press his case against the South American country in the US courts. On Monday, China’s Ex-Im Bank, which has an unpaid judgment worth $32 million against Grenada, sued the tiny Caribbean country in New York federal court to get its money back. China wheeled out the same “equal treatment” argument that Singer’s Elliott Management used against Argentina, and which was recently upheld at the appeals level for the first time in the US. China’s move marks the first time a creditor other than Singer and his cohorts have tested the maneuver in the US. Obama Tries Charm Offensive to Woo Republicans on Deficit (Bloomberg) The president broke bread last night with a dozen Republican senators, hosting a dinner at a luxury Washington hotel near the White House. Next week, he’ll visit Capitol Hill to meet separately with Republicans and Democrats in the Senate. Obama has also spoken by telephone with at least a half- dozen Republican lawmakers over the past few days about the budget and other priorities of his second term, including a rewrite of immigration laws and controlling gun violence. “There have been some problems, but we’re all adults and you just have to put the country ahead of party and you’ll be fine,” Senator Lindsey Graham of South Carolina, who helped organize the dinner, said before the meal. 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They can't be delusional like Ron Johnson is," Questrom said on "Fast Money Halftime Report." "This has been going on long enough. You can't say you're going to make your numbers for the year and then drop a billion dollars." Questrom, who has watched from afar as Penney's sales and stock have suffered, told CNBC that directors needed to act quickly. "If they think if it all of a sudden going to turn itself around, there is no way they can have reliable information – because Ron is not a source for that," he said. "The sooner they act, the better." 1 in 10 Yale students have engaged in prostitution, 3% have had sex with an animal (NYDN) Sexologist Dr. Jill McDevitt hosted the sex workshop session where around 55 students used their cellphones to answer questions about sex. The results were then published in real time on a screen. McDevitt, who also owns the Feminique sex store in West Chester, Pennsylvania, said the results showed "you can't have assumptions about people's backgrounds." Student Giuliana Berry, who hosted the event, told Campus Reform the workshop - part of Yale's Sex Weekend - aimed to increase understanding and compassion for people who indulged in "fringe sexual practices."

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