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Opening Bell: 4.27.17

Gary Cohn: the next Janet Yellen?; Deutsche Bank traders treading water; man commits crime against crime-fighting robot; and more.

Wall Street is buzzing about the possibility of Gary Cohn someday replacing Janet Yellen (CNBC)
"The buzz among those who claim Cohn confides in them is that he would like to eventually replace" Yellen, assuming Trump decides to move in a different direction when the chair's term ends in early February, Beacon Policy Advisors said in its daily report for clients Tuesday.

cohnilton

Wells Fargo, JPMorgan Wary of Auto Loans, But Pack Them in Bonds (BBG)
At least one Wall Street bank has steered clear of underwriting bonds backed by subprime auto loans. Bank of America Corp., which bought the biggest maker of risky mortgages as the housing bubble was bursting, has consciously avoided the subprime auto bond market out of fear that its reputation could suffer in a downturn, according to a person with direct knowledge of the matter. In consumer auto lending, Bank of America focuses on prime customers.

The Hedge Fund Manager Who’s Shorting America’s Malls (WSJ)
The exact size of Mr. Yip’s bet isn’t known. It makes up more than half the assets of Alder Hill Management, which manages about $200 million, said people familiar with his fund. When Mr. Yip cast a critical eye on regional malls’ debt in 2015, the CMBX 6 index was trading near its full value, implying a very low probability of defaults. Mr. Yip visited malls in Connecticut, Louisiana and elsewhere while on work trips and vacations, sometime taking his family along with him. He would walk three times around each shopping center, studying its mix of stores and chatting with store owners, workers and shoppers.

“All the best people left banking years ago” (EFC)
“A lot of people who had successful careers – the most talented people of my generation – have left the industry to do other things,” said Kerim Derhalli, the ex-Deutsche MD who himself has exited banking to run Invstr, a social network for amateur investors, when we spoke to him earlier this year. “The people who are hanging on are getting paid less every year as margins and volumes collapse. Their incomes are falling and their lifestyles are having to adjust, but they stay because they’re still getting paid much more than they would doing a comparable job in a different industry.”

Deutsche Bank outpaced by US rivals in investment banking (FT)
On an underlying basis, Deutsche said revenues in its global markets business were up 9 per cent, while sales in its corporate and investment banking arm were flat. By contrast, Deutsche’s US rivals managed to boost their investment banking revenues 21 per cent on average in the first quarter. Andrew Coombs, an analyst at Citi, said the numbers for Deutsche’s investment bank were “weak”.

Guy Hands on investing in a time of Trump: ‘The most difficult environment I have ever seen’ (MarketWatch)
This is the most difficult investing environment that I have seen in my lifetime as an investor. I started in 1982 — it’s more difficult than any time since 1982. And it’s because we don’t have that trajectory anymore. The world had an established view about how politics was done, how economics was done and that disappeared last year, because of Brexit, because of Trump.

Factor Investing – Tilting at Windmills (PragCap)
Factor picking has become the new stock picking. And when it comes to factor investing the asset manager still has to pick the right stocks that will match whatever “factor” they’re trying to replicate. So, factor investing is actually just stock picking by a different name. And there is clear evidence that asset managers are not very good at picking stocks whether they’re growth, value or whatever. As a result, tilting to factors in the stock market is a lot like tilting at windmills.

'Fist bumps' at hedge funds over Trump's tax plan (Reuters)
"Who needs to worry about carried-interest going away if you have a 15 percent pass-through tax rate," said hedge fund manager Jim Chanos, who runs Kynikos Associates. "This should really be called the 'Put Rich Guys Back on Top Tax Act of 2017.'"

Gett Acquires Juno for $200 Million to Challenge Uber (BBG)
The deal marks the end of Juno’s program to distribute restricted stock units to drivers, according to Keren Kessel, a spokeswoman for Juno. She said eligible drivers will receive a payout “based on an independent valuation” of their stock. She declined to provide details on how much drivers should expect to receive. Drivers won’t be offered stock units in the future but may be eligible for cash bonuses based on how much they drive, Kessel said.

“To get back to fair value, the S&P 500 would need to drop by 50%” (Finanz und Wirtschaft)
Q. So why do you think this is bubble-like behavior?
James Montier: Because I do not think people are rationally buying equities expecting very low future returns. I think they are buying them because they expect good returns. And when the returns do not materialize, that is probably when a correction or a crash will occur, because people will be disappointed.

POLICE: DRUNK MAN KNOCKED DOWN 300-POUND ROBOT IN MOUNTAIN VIEW (ABC7)
Police arrested a man accused of being drunk and knocking down a robot that was built to prevent crime near Terra Bella and Linda Vista Avenue in Mountain View. The 300-pound robot named K5 spins and occasionally whistles, so it's hard to understand why someone would want to knock it down.

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Opening Bell: 7.12.17

Gary Cohn could actually be Fed chief; Paul Singer wants to see Warren Buffett talk dirty; your sous-vide circulator doubles as a pawn in a global bot war; and more.

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Opening Bell: 12.1.16

Cohn to Trump; Whitney Tilson doesn't think much of Trump voters; Pablo the potty-trained dog; and more.

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Opening Bell: 12.14.16

Trump "smitten" with Gary Cohn; Ubers gonna Uber; Silicon Valley techies use their iPhones to schedule sex; and more.

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Opening Bell: 5.31.17

Gary Cohn wants to run the Fed; Morgan Stanley wants to turn its advisers into cyborgs; getting attacked by a bear looks pretty cool, actually; and more.

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Opening Bell: 7.6.17

Add Janet Yellen to the list of people concerned about the VIX; Deutsche Bank still eyeing Frankfurt; bomb found in Manhattan actually a nightclub's time capsule; and more.

Opening Bell: 01.16.13

Goldman Profit Soars (WSJ) "While economic conditions remained challenging for much of last year, the strengths of our business model and client franchise, coupled with our focus on disciplined management, delivered solid performance for our shareholders," Chief Executive Lloyd C. Blankfein said. Overall, the investment-banking arm recorded revenue of $1.41 billion for the quarter, up from $857 million a year ago and $1.16 billion in the third quarter. Financial advisory revenue rose 8.1% from year ago. Debt underwriting revenue surged to $593 million from $196 million in the year ago and the $466 million reported in the third quarter. Equity underwriting revenue popped 59% from the year ago and 61% from the prior quarter to $304 million. Revenue from fixed income, currency and commodity trading totaled $2.04 billion, versus $1.36 billion a year earlier and $2.22 billion in the third quarter. Revenue from equities execution rose 45% from a year ago to $764 million but fell 10% from the third quarter. Overall profit for the fourth quarter totaled $2.89 billion, compared with a year-earlier profit of $1.01 billion. Earnings per share, reflecting the payment of preferred dividends, jumped to $5.60 from $1.84. Net revenue, including net interest income, surged 53% to $9.24 billion. JPMorgan Profit Tops Estimates (WSJ) JPMorgan's fourth-quarter earnings surged 53% on strong revenue and better credit, as the bank further detailed the fallout from more than $6 billion in trading losses last year. The outsized, complex trades on credit default swaps tied to corporate bonds became known as the "London Whale." On Wednesday, the bank made public an internal report outlining mistakes and oversights by executives who played a role in the matter, including Chief Investment Officer Ina Drew, who has since left the bank, and Douglas Braunstein, who was chief financial officer during the episode and has since become a vice chairman. It also said its Treasury and Chief Investment Office, where the "Whale" trades were made, recorded a loss of $157 million on the fourth quarter, compared to net income of $417 million in the year ago. J.P. Morgan also said it halved the 2012 compensation of Chief Executive James Dimon to $11.5 million. Additionally, he will have to wait up to another 18 months before he can start exercising two million options that were awarded to him five years ago. Overall, J.P. Morgan reported a profit of $5.69 billion, or $1.39 a share, for the fourth quarter, up from $3.73 billion, or 90 cents a share, a year ago. Bankers Get IOUs Instead Of Bonus Cash (WSJ) Several thousand Morgan Stanley traders, investment bankers and other employees will get IOUs instead of cash when bonus day arrives Thursday, a fundamental change in Wall Street pay triggered by the financial crisis. The New York company will pay its bonuses in four equal installments, according to people briefed on the plan, with the first chunk coming in May and the last in January 2016. Employees who quit or are laid off before the payments stand to lose their deferred compensation unless they negotiate a separate deal with the company. "I don't think there will be a lot of cheers on the trading floors of Morgan Stanley," said Mark Williams, a former Federal Reserve bank examiner who now teaches at Boston University. "Bonuses were used to buy houses and cars. They were savings vehicles." AIG Seeks Approval To File More Bank Suits (NYT) Since the summer of 2011, the insurance giant American International Group has been battling Bank of America over claims that the bank packaged and sold it defective mortgages that dealt A.I.G. billions of dollars in losses. Now A.I.G. wants to be able to sue other banks that sold it mortgage-backed securities that plunged in value during the financial crisis. It has not said which banks, but possibilities include Deutsche Bank, Goldman Sachs and JPMorgan Chase. But to sue, A.I.G. first must win a court fight with an entity controlled by the Federal Reserve Bank of New York, which the insurer says is blocking its efforts to pursue the banks that caused it financial harm. Hungary Attacks Roubini Over Currency 'Advice' (CNBC) Hungary's Ministry for National Economy said in a statement that the forint began to depreciate after economist Nouriel Roubini – dubbed Dr Doom for his pessimistic forecasts – said in a newsletter that failure to secure a deal with the International Monetary Fund was bad news for the currency. The forint has been in decline since last week hitting seven-month lows earlier this week but has since gained some ground. Hungarian officials rounded on Roubini saying; "On Thursday speculators seem to have taken Roubini's advice and attacked the forint." BofA Takes A Mortgage Mulligan (WSJ) Less than two years after embarking on a painful retreat from home lending, Bank of America Corp. is girding for a new run at the U.S. mortgage business. Whether that gamble pays off will depend in large measure on how long the mortgage market's run of record profits continues. The Charlotte, N.C., company aims to sell more mortgages through its 5,000-plus branches, executives said. The fourth-biggest U.S. mortgage lender, after Wells Fargo & Co., J.P. Morgan Chase & Co. and U.S. Bancorp, is intent on "growing that business," Chief Executive Brian Moynihan said at a December investor conference. Eurozone Plan May Be Watered Down (WSJ) One of the euro zone's most significant commitments last year aimed at containing its financial crisis—a plan to allow the bloc's bailout fund to directly boost the capital of banks in countries facing debt troubles—could be undermined by technical complications and second thoughts by some governments. Germany Repatriates Gold Reserves (WSJ) Germany's central bank said it would remove nearly a fifth of its total gold reserves from deposits at the New York Federal Reserve Bank and the Bank of France and bring them back to Germany, amid a debate in the country over the transparency of its global gold holdings. Inside Trader Sent To Kinnu-can (NYP) John Kinnucan, the former head of Portland, Ore.-based firm Broadband Research, was sentenced to four years and three months in prison after admitting to feeding illegal stock tips to his well-heeled hedge fund clients. Reporter fired for secret stripping job gets new journalism gig with same (NYDN) Tressler, 30, is now a reporter for the San Antonio Express-News, covering “cops, crime and general mayhem,” according to her Twitter account. In April, the gorgeous Tressler was fired from her job as a society reporter for the Houston Chronicle for failing to tell the newspaper about her after-hours gig as a stripper, which she chronicled in her blog, “Diary of an Angry Stripper.” Tressler then sued her former employer's parent company, the Hearst Corp., which also owns the Express-News, alleging that the firing was unfair. She hired celebrity lawyer Gloria Allred and filed a complaint with the U.S. Equal Employment Opportunity Commission, saying the paper’s reason for firing her -- failing to write on her application that she had been working part-time as a stripper -- was ridiculous. "I've worked at KB Toys. I've worked at a surf shop. I've worked at multiple coffee shops. I've worked at Taco Bell. I've worked as a line cook at a restaurant," Tressler told the Las Vegas Review-Journal in June. “Do you really want me to put every single one of those on my job application?" Over the summer, Tressler embarked on a national stripping tour and pushed a book, which shared the same title as her blog. She also picked up some freelance assignments for “Good Morning America.” After the suit and the tour, it seemed unlikely Tressler would re-enter Texas journalism, let alone for a newspaper owned by the same parent company that fired her. Some have suspected that her new job was part of a settlement she reached with the company.

Getty Images

Opening Bell: 4.21.17

Goldman doing a little Brexit of its own; Deutsche Bank comes first in something; Elon Musk is OK with being a robot's house cat; and more.

(Getty Images)

Opening Bell: 3.29.17

BlackRock bets on robots; BuzzFeed angles for IPO; at least Raiders fans will get a brothel out of Vegas move; and more.