Opening Bell: 5.11.17

Comey Firing Distracts Trump White House, Putting Agenda at Risk (BBG)
Democrats, furious over the firing even though many of them had lambasted Comey for publicly discussing the FBI’s investigation of Hillary Clinton last year, predicted legislative work would cease. "Senate needs to focus on the constitutional crisis Trump created, not business as usual," Senator Jeff Merkley, an Oregon Democrat, said on Twitter.

‘Brexit’ Imperils London’s Claim as Banker to the Planet (NYT)
On a recent afternoon at Citigroup’s headquarters, traders sit at banks of computer screens watching prices in markets scattered from Shanghai to São Paulo. A Swedish trader helps a money manager in Paris place a complicated bet that German government bonds will fall. “There’s about 10 questions that immediately come to mind as to whether we could execute that trade in London after Brexit,” Jerome Kemp, Citi’s global head of futures, says.

Hedge Funds Facing U.S. Criminal Probe Over Bond Valuations (BBG)
Having prosecuted traders who lied to customers about bond prices, the government is now scrutinizing hedge funds that allegedly solicited bogus price quotes from brokers, according to three people familiar with the matter who asked not to be identified. Such a practice would have enabled the funds to pump up the value of illiquid securities on their books.

Bond Traders' Bonuses Set to Rise 15% as Banks Resume Big Raises (BBG)
The reversal for bond traders in recent months contrasts with the situation facing some of their biggest clients. Hedge funds and asset managers will generally hold pay flat this year, according to estimates released Wednesday. Both of those groups have cut incentive pay the past few years, the firm’s data show.

The Volcker Rule: How Trump’s New Regulator May Unleash Big Banks (WSJ)
“There’s a lot that can be done” by the five agencies that enforce the rule, acting comptroller of the currency Keith Noreika said. Then he added: “I hope we don’t have to get to this, but there could be things that could be done even by our agency unilaterally if we had to,” such as “reinterpreting what is proprietary trading. [...] The ultimate problem with the Volcker rule is no one knows what prop trading is,” he said.

The Best Unknown Indicator (Macro Tourist)
Over the years I have learned the hard way not to fade Yardeni’s model. It doesn’t mean stocks cannot decline, but until I see either the industrial commodities roll over (and not just Chinese Iron ore), or employment claims skyrocket, I will avoid calling for a big crash. It’s tough for me to put this down on paper, but really, the proper bet is to assume Yardeni’s model will once again prove correct, and buy stocks.

Whole Foods announces new CFO amid board shakeup (NYP)
Just one month after Barry Rosenstein’s activist hedge fund Jana Partners announced an 8.3 percent stake in Whole Foods, the high-end grocer on Wednesday announced a laundry list of changes — including a new chief financialofficer and five new board members.

Transcript: Interview with Donald Trump (Economist)
TRUMP: Have you heard that expression before, for this particular type of an event?
THE ECONOMIST: Priming the pump?
TRUMP: Yeah, have you heard it?
ECONOMIST: Yes.
TRUMP: Have you heard that expression used before? Because I haven’t heard it. I mean, I just… I came up with it a couple of days ago and I thought it was good. It’s what you have to do.
ECONOMIST: It’s…
TRUMP: Yeah, what you have to do is you have to put something in before you can get something out.

Trump Administration, Senators Put Fannie, Freddie Overhaul Back in Play (WSJ)
The Senate Banking Committee has begun behind-the-scenes work on the issue of how, exactly, to revamp the companies. The senators want to develop a framework to decrease the government’s outsize role backstopping the nation’s $10 trillion mortgage market. On Thursday, the panel will hear testimony from Mel Watt, the director of the Federal Housing Finance Agency, which controls Fannie and Freddie, in the first step of a process that could play out in the coming months.

Porn Star Molly Cavalli Accused Of Faking Shark Attack For Viral Glory (HuffPo)
Bryce Rohrer, owner and operator of Florida Shark Diving, told the Palm Beach Post that Cavalli and her crew contacted him two months ago about doing a shark dive and faking an injury. “I was talking directly to Molly and she just said, ‘Hey, we are looking to do a shoot faking a shark bite and it’s strictly in order for it to go viral,’” Rohrer said. “We immediately declined. We are pro-shark, pro-wildlife, and want to show the importance of sharks, not villainize them.”