Opening Bell: 5.10.17

Greenberg won't see any more green; Hertz bet bites Icahn; Jimmy John denies humping shark in the nude; and more.
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Former AIG CEO Hank Greenberg (Getty Images)

Former AIG CEO Hank Greenberg (Getty Images)

Maurice Greenberg Loses Bid for Damages From A.I.G. Bailout (NYT)
In its opinion on Tuesday, the appeals court said, “Outside third parties with leverage over a transaction, even in a take-it-or-leave-it scenario, do not necessarily have a responsibility to protect the interests of a counterparty, less so the interests of a counterparty’s constituents.” Mr. Boies said he would ask the Supreme Court to review the decision.

Billionaire Carl Icahn Loses $179 Million on Hertz Double Down (BBG)
“He could buy more stock but at some point there has to be a sign of stabilization and a clear path to a turnaround,” Joel Levington, an analyst with Bloomberg Intelligence, said in a phone interview. “The market was hoping for a credible plan and management didn’t reveal one. Investors don’t like a black box.”

Comey's Firing Is a Crisis of American Rule of Law (BBG View)
Comey may arguably have acted unethically by announcing the reopening of the Clinton email investigation shortly before November’s election -- but Trump didn’t say so, and surely he’s the last person in the world who would make that claim. The firing of Comey is blatantly political. The bottom line is presumably that the Trump administration knows it can’t control Comey, and so it doesn’t trust him.

Former SAC Manager Martoma Makes Another Case For His Release (WSJ)
The judges asked whether a meaningful relationship means one that is ongoing, or whether a relationship can be considered close if only one party is pushing for the relationship to continue. Paul Clement of Kirkland & Ellis, representing Mr. Martoma, said the relationship needed to be one in which gifts are exchanged. Mr. Clement wrote in court papers that the friendship between Mr. Martoma and one of the doctors “consisted of some pleasantries over e-mail and a single cup of coffee.”

Market Anomalies Fail to Replicate (Marginal Revolution)
The anomalies literature is infested with widespread p-hacking. We replicate the entire anomalies literature in finance and accounting by compiling a largest-to-date data library that contains 447 anomaly variables. With microcaps alleviated via New York Stock Exchange breakpoints and value-weighted returns, 286 anomalies (64%) including 95 out of 102 liquidity variables (93%) are insignificant at the conventional 5% level.

Sorry Harvard and Yale, the Trading Whiz Kids Are at Baruch College (WSJ)
“In theory, you think Baruch College students have some kind of inferiority complex regarding Harvard. We don’t. Here, you don’t have to convince the students that [the trading club] is something they want to do,” said Dan Stefanica, a Baruch College professor who helped coach the Traders Club.

Detroit revival spurs JPMorgan to make fresh $50 million pledge (Reuters)
The $150 million commitment is tiny compared with the bank's $2.5 trillion balance sheet, but JPMorgan is the biggest bank in Detroit, aligning its interests with the city's. Chief Executive Jamie Dimon has made it a personal mission to improve Detroit, visiting at least six times to check on the initiative. Dimon has met with contractors who needed working capital to repair homes and with food entrepreneurs who needed shared commercial kitchens for bread baking and sausage-making.

How to achieve an immediate pay rise at Deutsche Bank (EFC)
Headhunters say Deutsche does have money to spend on its existing staff (alongside alleged guarantees for new hires), it’s just being very careful about how it spends it. If someone strategically important resigns for a role elsewhere, Deutsche has been known to better the new offer and maybe make a promotion along with it. In this way we understand that exits have been thwarted.

Barclays CEO: ‘No need’ for Brexit job moves (FNLondon)
“We do not currently see a need in our options to shift British jobs or significant operations elsewhere,” Staley said. “If we require a build-up of capability in another European Union jurisdiction as part of our plans then we can do so, and we will.”

Step Aside, Ellen DeGeneres: The New Retweet Champion Is a Nugget-Hungry Teenager (NYT)
Asking why a tweet goes viral is like asking why your life has brought you to this very moment. Perhaps it’s random, perhaps it’s divine, perhaps it’s unknowable. No mere human, no Kardashian nor YouTube star, can decide. When some 140 characters run aground while seemingly equal tweets are hoisted to the heavens, anyone searching for meaning should expect a long, long voyage. Anyway, the Nugget Kid will be getting his free chicken nuggets.

Jimmy John's Says That's Not Jimmy John Nude And Humping A Shark (Deadspin)
“I choose to hunt and I choose to fish,” he said. “Everything I’ve done has been totally legal. And the meat has been eaten, if not by me than by someone I’m with. I don’t hunt big African game anymore.” Liautaud’s love of hunting and toothy smile made him a possibility for the identity of the butt-naked man hugging the shark.

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(Getty Images)

Opening Bell: 5.11.17

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Apple To Announce Plans For Cash Hoard (WSJ) Apple will outline what it plans to do with a growing pile of cash by next month, according to Howard Ward, chief investment officer at Gamco Investors Inc. Apple, which has been grappling with investor criticism over the handling of its $137.1 billion in cash and investments, will add $42 billion in earnings to that sum in 2013, Ward said. Greenlight Capital Inc.’s David Einhorn has been urging Cupertino, California-based Apple to issue high-yielding preferred shares to spread the funds among investors. Investors are also urging Apple to consider a higher dividend payout. “We’re going to get an announcement from the company as to how they intend to reallocate some of their cash,” Ward said in an interview today on Bloomberg Radio’s “Surveillance” with Tom Keene. “They will put a floor under their stock at a higher price than it is today.” AIG shareholders win class-action status in lawsuit versus U.S. (Reuters) Two groups of American International Group shareholders won class-action status from a federal judge on Monday in a $25 billion lawsuit by former Chief Executive Maurice "Hank" Greenberg over alleged losses caused by the U.S. government's bailout of the insurer. U.S. Court of Federal Claims Judge Thomas Wheeler also appointed Greenberg's lawyer, David Boies, of Boies, Schiller & Flexner LLP, as lead counsel for the classes. Greenberg's Starr International Co, once AIG's largest shareholder with a 12 percent stake, sued the United States in 2011 over what eventually became a $182.3 billion bailout for the New York-based insurer. It said that by taking a 79.9 percent AIG stake and then conducting a reverse stock split without letting existing shareholders vote, the government conducted an illegal taking that violated the 5th Amendment of the U.S. Constitution. Citing Boies' estimate that "tens of thousands" of shareholders might be affected, Wheeler said "class certification is by far the most efficient method of adjudicating these claims." Both Sides Of SEC Nominee Face Heat (WSJ) In one version, Ms. White is a no-holds-barred crime fighter known for stretching the law to jail mob bosses and international terrorists. In another, Ms. White is a friend of Wall Street who worked for the past decade for the law firm Debevoise & Plimpton LLP, where she represented giant banks such as J.P. Morgan Chase. Blackstone: We're Betting Big On Residential Real Estate (CNBC) "Blackstone is now the largest owner of individual houses in the United States," Schwarzman told CNBC's "Squawk on the Street" Monday, pointing to his company's $3 billion portfolio of residential real estate. But given the nascent recovery in the housing market, they're not buying and selling them quickly but rather renting them out. "It's a good business for us. It's a new thing, but it's also good for America," he said. Icahn Gets Confidential Look At Feds Books (Reuters) Dell Inc has agreed to give Carl Icahn a closer look at its books, less than a week after the activist investor joined a growing chorus of opposition to founder Michael Dell's plan to take the world's No. 3 personal computer maker private...A source with knowledge of the situation said Icahn's and Dell's confidentiality agreement does not have a contractual "standstill" obligation - meaning he is not obligated to stop trading stock in the company. But the activist investor would not be able to trade the stock while he is privy to non-public information in any case, the source added. Phoenix society gives gator happier life with prosthesis (AZC) The alligator is Mr. Stubbs, who is part science project, part human endeavor, and much more. He’s also half-gator, half-rubber. The 11-year-old crocodilian now sports a 3-foot-long prosthetic tail, attached firmly with nylon straps. It replaces the original, which was bitten off more than eight years ago. As far as anyone at the Phoenix Herpetological Society knows, Mr. Stubbs is the first alligator to tolerate, if not sport, a prosthesis. It will take months, however, before Mr. Stubbs learns how to properly use the tail. For now, handlers are happy with smaller milestones. “The fact he doesn’t try to bite it (the tail) is a good sign,” said Russ Johnson, president of the Phoenix Herpetological Society. “Learning how to use it is going to take a lot of training.” The months-long project was overseen by someone well-versed in anatomy. Marc Jacofsky is executive vice president of research and development at the CORE Institute in Phoenix, which specializes in orthopedic care — for humans. While visiting the Herpetological Society, Jacofsky was asked if it would be possible to make an artificial tail for Mr. Stubbs. “I looked and saw there was enough there that we could probably do something that wouldn’t involve surgery,” Jacofsky said. “I also liked the idea because it would improve his life. Our motto at the CORE Institute is ‘Keep life in motion,’ and this certainly fit in with that. I was on board.” Jacofsky estimated the project has cost the Core Institute about $6,000 in donated labor and materials. Mr. Stubbs had been a project since shortly after arriving at the center in May 2005. The then-3-year-old gator was one of 32 confiscated from the back of a truck pulled over near Casa Grande, Johnson said. Officers called in the Arizona Game and Fish Department as soon as the cargo made its presence known. “Scared the heck out of the officer,” Johnson said. “No one expects to find alligators when you look into the back of a truck.” Greece Faces 150,000 Job-Cut Hurdle to Aid Payment (Bloomberg) Greece is locked in talks with international creditors in Athens about shrinking the government workforce by enough to keep bailout payments flowing. Identifying redundant positions and putting in place a system that will lead to mandatory exits for about 150,000 civil servants by 2015 is a so-called milestone that will determine whether the country gets a 2.8 billion-euro ($3.6 billion) aid instalment due this month. More than a week of talks on that has so far failed to clinch an agreement. Failed Sale Of Gleacher Is A Warning For Directors (WSJ) The Dell drama is still unfolding, but for a cautionary tale of how boards, even when they may be well-intentioned, can harm investors of a takeover target, take Gleacher. Shares in the small investment bank have lost more than 60% in the past year as the prospects for a deal evaporated, business dwindled and star traders left. Ironically for a firm that bears the name of Eric Gleacher, who made his name advising on big deals in the 1980s, the company failed to sell itself. At least as some critics see it, its independent directors are to blame. SEC Says Illinois Hid Pension Troubles (WSJ) For years, Illinois officials misled investors and shortchanged the state pension system, leaving future generations of taxpayers to foot the bill, U.S. securities regulators allege. The Securities and Exchange Commission on Monday charged Illinois with securities fraud, marking only the second time the agency has filed civil-fraud charges against a state. Bernanke Provokes Mystery Over Fed Stimulus Exit (Bloomberg) When Ben S. Bernanke asserted last month that the Federal Reserve doesn’t ever have to sell assets, he raised questions about how the central bank can withdraw its record monetary stimulus without stoking inflation. The Fed may decide to hold the bonds on its balance sheet to maturity as part of a review of the exit strategy Bernanke expects will be done “sometime soon,” he told lawmakers in Washington on Feb. 27. This would help address concerns that dumping assets on the market will lead to a rapid rise in borrowing costs. It also allows the Fed to avoid realizing losses on its bond holdings as interest rates climb. Man shot in buttocks at Calle Ocho Festival unaware he was wounded (Miami Herald) The shooting occurred around 4:30 p.m. as the man walked along Southwest Eighth Street and 11th Avenue, part of the throng of revelers who gather annually at the street festival in Little Havana. It’s unclear if something sparked the violence between the two men, or if the shooting was unprovoked. At first the victim did not realize he had been shot and kept strolling along the festival route. “He discovered later that he was bleeding and then passed out,” said Miami police spokesman Sgt. Freddie Cruz. The victim, who was hit in the left buttocks, was taken to Jackson Memorial Hospital, where he is in stable condition and expected to recover.