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Opening Bell: 5.25.17

Silicon Valley edges out hedge funds in talent war; initial coin offerings are here, they're weird, get used to it; how not to win a House election (hint: it involves body-slamming a reporter); and more.
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Talent Battle: Hedge Funds Vs Silicon Valley (WSJ)
“Google is trying to hoover up every data scientist in the world,” said Luke Ellis, chief executive of Man Group PLC, the world’s largest publicly traded hedge-fund manager based in London. “Google has got more money than I have. I can’t compete with Google just on that.”

silicon valley ping pong fire

Tesla Analyst Split Comes Down to Tech Believers Versus Car Guys (Bloomberg)
Most of the seven analysts who rate the stock a buy are focused on coverage of technology companies, while a majority of the six who advise investors to sell are dedicated to automobiles, according to data compiled by Bloomberg and Sanford C. Bernstein & Co. While the tech folks are honing in on the potential for disrupting the century-old industry, those who concentrate on manufacturing efficiency and vehicle reliability see the stock’s valuation as out of line with reality.

This Old School Hedge Fund Is Going Quant (WSJ)
In Magnetar co-founder Ross Laser’s office hangs a framed African proverb. The gazelle, the poem begins, “knows it must run faster than the fastest lion or it will be killed.” “It’s a metaphor,” Mr. Laser says.

Ex-Goldman Star Who Traded Through Quake Makes Unusual Move (BBG)
As the biggest earthquake ever recorded in Japan rocked the Roppongi Hills skyscraper in central Tokyo, Makoto Yamada put on his helmet, dropped to his knees, and traded. “We had an option to leave, but we couldn’t leave the position at the time," the 39-year-old former Goldman Sachs Group Inc. quant said, recalling the March 2011 quake and hours of aftershocks that he and some trader colleagues braved from the bank’s offices on the 48th floor. My “life is important, but protecting the P&L is more important."

The Hottest New Way of Investing in Silicon Valley Comes With a Big Catch (BBG)
Take Gnosis, a prediction market application based on the Ethereum blockchain that raised $12.5 million in 12 minutes on April 24, resulting in a market cap of almost $300 million. It’s generated no revenue and has little more than a white paper describing what it intends to do. Yet its tokens, which would allow users to bet on things such as election outcomes, soared eightfold in the three weeks since May 2, giving it a valuation of over $2 billion -- more than the average Russell 2000 Index stock.

RELATED: Initial coin offerings risk damaging your financial health (FT)
The terms and conditions go to pains to stress the tokens, which are always limited in number, do not “involve the purchase of shares or any equivalent in any existing or future public or private company, corporation or other entity in any jurisdiction.” A simplistic interpretation suggests they’re charitable fundraisings in crypto currency such as bitcoin or ether for ventures which in turn promise to spend the proceeds on digital service development. You the investor allegedly have an interest in investing because you many benefit from the service that’s being brought to market.

Tulips, Myths And Cryptocurrencies (Stratechery)
As Thompson explains, tulips in fact were becoming more popular, particularly in Germany, and, as the first phase of the 30 Years War wound down, it looked like Germany would be victorious, which would mean a better market for tulips. In early October, 1636, though, Germany suffered an unexpected defeat, and the tulip price crashed, not because it was irrationally high, but because of an external shock.

S Korea’s zombie companies threaten ‘economic powder keg’ (FT)
The nation recorded more than 3,278 zombie companies, including 232 listed groups, in 2015 — a 17 per cent jump from 2012, according to the latest official data, prepared by the Bank of Korea and Financial Supervisory Service. [...] According to the report, listed zombie companies employ about 100,000 people and have sales equal to more than 4.5 per cent of South Korea’s GDP.

BNP Paribas Bankers plotted to rip off clients in online chat room (NYPost)
Ten traders, mostly in New York but also in London and Paris, had coordinated their plans to manipulate currency rates in a chat room, called “We Reign,” according to a statement of facts from the DFS. “[W]e got a little cartel really brewing,” wrote one trader, according to the text of the chat room obtained by the DFS. “Please keep your lips sealed thx,” another wrote.

Banks and funds will never quite be forex friends (Reuters)
On U.S. election day last November, settlement bank CLS executive David Puth stood in line behind Woody Allen to vote in his Manhattan neighbourhood and then got on a plane to be shouted at for the rest of the day by a group of rich fund managers. "It was hostile," he says. "They were really angry about how some counterparties behave. I said: 'So why do you have a relationship with them if you don't trust them?'"

This 'Trump trade' doesn't need Congress and that's why Wall Street likes it (CNBC)
"Our conversations with trade lawyers have noted that the Trump administration has had a 'chilling effect' with respect to growing trade with the United States, especially in Asia," said Credit Suisse research analysts Curt Woodworth and Serena Rocha Calejon in a report Wednesday. "Trade policy is structurally changing the dynamics of steel trade in the U.S.," they said, upgrading the steel sector.

Fox News team witnesses GOP House candidate 'body slam' reporter (Fox News)
At that point, Gianforte grabbed Jacobs by the neck with both hands and slammed him into the ground behind him. Faith, Keith and I watched in disbelief as Gianforte then began punching the reporter. As Gianforte moved on top of Jacobs, he began yelling something to the effect of, "I'm sick and tired of this!"


silicon valley ping pong fire

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Opening Bell: 2.27.17

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