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Opening Bell: 4.5.17

Morgan Stanley analysts don't need your stinkin' math; Lacker ain't the leaker; "Drunk Lives Matter"; and more.
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Morgan Stanley made an error analyzing Snapchat, and it shines a light on some big flaws in Wall Street research (BI)
"We have corrected a tax calculation error in our model that overstated adjusted EBITDA in 2021-2025. We have updated the text and charts in the following note to reflect our estimate changes. Note that our revenue forecast and fundamental top-line drivers (DAUs, ad load, etc.) remain unchanged." One other thing that didn't change, despite some significant adjustments to the financial model Morgan Stanley published? That $28-a-share price target.

Fed Leak Probe Dooms Lacker But Leaves Key Question: Who Leaked? (BBG)
“The story is not over today,” said Andrew Levin, a professor at Dartmouth College who was previously a special adviser at the Fed board and helped then-Vice Chair Janet Yellen develop the Fed’s policy on external communication. “There are a number of distinct details that suggest that Lacker wasn’t the main source of information.”

I tried to ask Yellen about the Fed leak — and the question echoed for longer than I expected (BI)
After the Yellen press conference, I took two weeks of paid leave for the birth of my daughter. When I returned, my editor at the paper told me I would no longer be attending Fed press conferences. No reason was given, and I left the job a few months later. [...] Fast-forward to April 4, 2017: Richmond Fed President Jeffrey Lacker resigns abruptly after admitting he was a source of the leak.

Fed governor Tarullo says Volcker rule is harming banks (FT)
In a speech setting out his parting thoughts, Mr Tarullo warned that it would be “tragic” if the lessons of the crash were forgotten so soon as proposals for deregulation swirl around the sector, adding that it was crucial that the “strong capital regime be maintained”.

Sorry Jamie, Fed economists think bank capital is still too low (Alphaville)
Being conservative, the Fed economists estimate that each additional percentage point of capital in the banking system “costs” at most 7 basis points in terms of interest rates on loans. Put another way, they think adding another 13 percentage points of capital would be equivalent to a grand total of…91 extra basis points on the rates charged on bank loans to households and businesses.

The Unintended Consequences of Blockchain Are Not Unpredictable: Respond Now Rather Than Repent Later (Streetwise Professor)
Public blockchains have not been able to eliminate trust without cost. In Bitcoin, trust is replaced with “proof of work.” Well, work means cost. The blockchain mining industry consumes vast amounts of electricity and computing power in order to prove work. It is highly likely that the cost of creating trusted entities is lower than the cost of proof of work or alternative ways of eliminating the need for trust. Thus, a (natural monopoly) commercial blockchain is likely to have to be a trusted centralized institution, rather than a decentralized anarchist’s wet-dream.

What Would Jesus Disrupt? (BBG)
Named the fastest-growing church in America in 2015, Crossroads has been described by the Cincinnati Business Courier as both an entrepreneurial church and a church for entrepreneurs. Indeed, it was originally a startup—or more accurately an unofficial spinoff from Procter & Gamble Co., the $65 billion conglomerate based downtown, a few freeway exits south of the main church.

Strategist Ed Yardeni: Bonds have not ‘bought into’ the big rally (CNBC)
"It seems that the bond market just hasn't really bought into the idea that inflation is coming back, or that economic growth is going to be surprisingly strong," Yardeni Research president Ed Yardeni said Tuesday. "The stock market seems to be more attuned to that kind of growth."

Man in 'Drunk Lives Matter' T-shirt charged with DUI (PennLive)
A man wearing a T-shirt that says "Drunk Lives Matter" was charged with DUI by Newville police. Elwood Gutshall III, 44, wearing a green St. Patrick's Day T-shirt, was charged March 19 with DUI after police said he committed several traffic violations.

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