Hedge Funds Creep Into Valeant Seeing Rebound That Eluded Ackman (BBG)
Thirty-five hedge funds made small wagers in Valeant in the first quarter, according to data compiled by Bloomberg, reflecting a cautiousness that the worst may not be over for the drugmaker. Deerfield Management took a new stake of 1.5 million shares valued at $16.5 million as of March 31. Bogle Investment Management and Point72 Asset Management also initiated investments.
Big Banks Can Relax, Trump’s Modern Glass-Steagall Probably Doesn’t Mean Breaking Them Up (WSJ)
“When the Treasury Secretary talks about instituting a 21st-Century Glass-Steagall, for him I think it means coming to a resolution of rationalizing the good parts of Glass-Steagall, especially the parts we have that remain, and not taking on the negative baggage of what we left behind,” Mr. Noreika said.
Would You Let Trump Run Your Company? (BBG)
The Comey fracas is the latest in a long list of apparent transgressions for which a normal CEO might lose his job. In the last week, Trump stood accused of having passed on intelligence secrets to the Russians. Any business chief who invited a competitor into the boardroom and then disclosed sensitive information would be in peril. (Klaus Kleinfeld lost his job at Arconic Inc. merely because he wrote an unauthorized stroppy letter to a truculent shareholder.) Appointing inexperienced relatives to important positions is not normally seen as good corporate governance. Jes Staley is currently in trouble at Barclays Plc just for allegedly protecting a friend. The White House was made aware that Flynn had lied to the vice president on Jan. 26, but he didn’t hand in his resignation to Trump until Feb. 13. Any board would want an explanation for that delay. Finally, any CEO who says something that is manifestly untrue in public or on his résumé is in hot water. Those who refuse to correct themselves quickly and satisfactorily often have to go—as happened to the bosses at Yahoo! Inc. and RadioShack.
The currency of the future has a settlement problem (FT Alphaville)
The final irony, given bitcoin’s decentralised and real-time settlement obsession, is how the market structure has evolved to minimise the cost of transaction. Traders, dealers, wallet and bitcoin payments services get around transaction settlement choke points and fees by netting transactions off-blockchain. This over time has created a situation where the majority of small-scale payments are not processed on the bitcoin blockchain at all. To the contrary, intermediaries operate for the most part as trusted third parties settling netted sums as and when it becomes cost effective to do so.
Monetary Policy and Bubbles (Neel Kashkari's Blog)
My takeaway from these countries’ experiences is that when asset prices are climbing rapidly, they can be very difficult to slow down, even with policy tools that are targeted squarely at the asset class. That suggests to me that if central bankers were to try to use monetary policy to slow those bubbles down, the rate increases necessary to be effective would likely be large, resulting in high economic cost to the rest of the economy.
Trump’s silent Twitter account spooks Wall Street investors (NYP)
Traders were growing increasingly concerned throughout the morning after Trump didn’t take to Twitter to rebut Tuesday’s bombshell report that he asked Comey during a February meeting to stop the FBI investigation into his former adviser’s ties to Russia. “I don’t know what that’s about. That looks a little interesting, doesn’t it? We’re always just one tweet away,” Chris Rupkey, chief financial officer at MUFG Union Bank, told The Post.
Wells Fargo, Consumers Try to Rescue Bogus-Account Settlement (BBG)
“There’s been no real discovery; there’s no way to know the real extent of the damages,” said Zane Christensen, an attorney for consumers in Utah. “This settlement is entirely based on numbers that come from Wells Fargo’s own admission. We don’t believe Wells Fargo is airing all of its dirty laundry publicly.”
Darwin visits Wall Street (MIT News)
As Andrew Lo notes in the book, the Efficient Markets Hypothesis assumes that individuals always maximize their expected utility — they always find the optimal way to invest. Lo’s adaptive markets hypothesis relaxes this dictum on two counts. First, a successful investing adaptation doesn’t have to be the best of all possible adaptations — it just has to work fairly well at a given time. And second, Lo’s adaptive markets hypothesis does not hold that people will constantly be finding the best possible investments. Instead, as he writes in the book, “consumer behavior is highly path-dependent,” based on what has worked well in the past. Given those conditions, the market equivalent of natural selection weeds out poor investment strategies, Lo writes, and “ensures that consumer behavior is, while not necessarily optimal or ‘rational,’ good enough.” Not perfect, but decent.
Duck Sex and the Patriarchy (New Yorker)
Here again, the coevolutionary dynamics of duck sex may clarify how men came to regain social control over female sexuality. Like a cultural version of the toothy spikes on a ruddy duck’s penis, patriarchy may have arisen as a cultural countermeasure, reversing the advances in female autonomy gained in the millions of years since hominins diverged from chimpanzees. When sexism becomes unacceptably antisocial and hopelessly unsexy, then patriarchy may finally give up its remaining weapons. So yes, Sean Hannity, we do need to know more about duck genitalia.