Morgan Stanley CEO Sees Trading Drop Similar to JPMorgan, Bank of America (BBG)
James Gorman said markets are facing a “conundrum,” with economic growth generally strong but the world facing an uncertain political environment. Trump’s administration has faced resistance in pushing an ambitious agenda of tax overhaul and repealing Obamacare, he said. “There is enormous uncertainty which typically would breed tremendous volatility and it’s not,” Gorman said. “It’s this very passive perspective that investors have and I think the downside risk at this point is outweighing the upside risk.”
‘Some real problems with Canada’: Muddy Waters founder says Home Capital selloff among nervous-investor signals (Financial Post)
“When I see a reaction like we saw to a stock that I had never heard of because people were evidently concerned that we were about to short it, that tells me that maybe we’re at a point in Canada where investor denial is just starting to crack.”
Wells Fargo barred from business with New York City (FT)
Wells has slipped down the rankings of banks that underwrite municipal debt. It now stands in seventh place, behind rivals Goldman Sachs and Morgan Stanley. So far this year it has sold $9.05bn of debt on behalf of US municipalities, down nearly a third from year ago levels, according to Bloomberg data.
Jeremy Corbyn and the Bizarre World of the Bond Trader (Gadfly)
In the bizarre pre-election world of British government debt, it seems whatever outcome you expect, you get the same result. Comfortable majority for Theresa May, yields dip. Polls tightening on signs that Labour Party leader Jeremy Corbyn might be less hopeless than thought, yields dip. Nightmare scenario of a hung parliament, yields dip.
Uber Posts $708 Million Loss as Finance Head Leaves (WSJ)
The ride-hailing company on Wednesday told The Wall Street Journal first-quarter revenue was $3.4 billion, up 18% from the fourth quarter. Its loss, excluding employee stock compensation and other items, was $708 million, narrower than the $991 million reported three months earlier. The company, which has raised some $15 billion in equity and debt funding, said it still has $7.2 billion of cash left on hand, about the same as it had at the end of last year.
Cohen Fund Not Too Big to Succeed (Gadfly)
There are signs that Cohen is shifting his strategy once again. Last year, he put $250 million into a firm that identifies hedge funds that invest using math-driven and computer-executed trading strategies. Quant is a pretty good choice for Cohen. It's harder to accuse computers of insider trading, and they are easier to supervise. But it's unclear whether he will be able to calibrate his formulas better than the other hedge funds in the hot space. Cohen's recent performance has not been all that impressive, with Point72's returns basically flat last year.
Are Hedge Funds Worth As Much As They Say They Are? (Columbia Law)
When accounting for illiquidity or managed pricing, hedge funds tend to hedge a lot less than initially thought. Indeed, for most hedge fund categories, the lagged betas are larger than the standard beta. Specifically, it appears that “poor performers,”8 i.e. hedge fund styles such as Managed Futures, Convertible Arbitrage, Bond Arbitrage and Equity Market Neutral, do not provide investors with appropriate diversification benefits.
This Blockchain Bubble Might Be a Good Thing (BBG)
Beyond gambling and speculation, there aren’t many popular uses for digital currency right now. A recent token offering called PonzICO promises to apply the proceeds towards buying the founder a Tesla. Token holders get nothing more than the right to vote on the color of the car, and somehow even that project collected nearly $3,000.
Report: 87% Of Goldman Sachs Employees Began Job With Plans To Take Down Company From Inside (The Onion)
“Our data indicate that nearly nine out of 10 entry-level employees at Goldman Sachs started off as idealistic crusaders who only pursued investment banking careers to wage a campaign of internal subversion in order to bring the corrupt capitalist machine to its knees,” read the report in part, adding that most staffers abandon their grand schemes by their second or third year upon receiving a few bonuses or securing their first promotion.
Mr. Met flips the bird to a fan (NYP)
A Mets official told The Associated Press more than one person wears the Mr. Met costume during each season, and the person who donned it Wednesday night will not do so again. The Mets official spoke on condition of anonymity.