Opening Bell: 6.13.17 - Dealbreaker

Opening Bell: 6.13.17

Inside Gary Cohn's unenviable White House job; Tim Cook dishes on Apple's autonomous car project; a thing called "potcoin" sent Dennis Rodman to North Korea; and more.
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Gary Cohn Has Profited From Big Mistakes. So Why Not Go Work for Trump? (NYMag)
This spring, things started to turn, as they do in the volatile market of the Trump White House. Cohn and his team, according to sources, had for months tried to get Trump’s attention on the particulars of tax reform, to no avail. Until, suddenly, they had it, when Trump promised to deliver the biggest tax cut “ever.” The subsequent press conference, at which Cohn and Mnuchin circulated a vague one-page wish list they’d evidently cooked up over the weekend, was widely ridiculed. “We will get back to you with definitive answers on all these details,” Cohn said. “We have a broad-brush view.” And finally: “Look, we will give you more details as we have them.” “What’s it like working for that guy?” Cohn’s Wall Street buddy asked when he ran into him at their local diner. Cohn smiled, or maybe gritted his teeth. “You can imagine,” he said.

Cook Says Apple Is Focusing on Making an Autonomous Car System (BBG)
“We’re focusing on autonomous systems,” Cook said in an interview on Bloomberg Television. “It’s a core technology that we view as very important.” “We sort of see it as the mother of all AI projects,” Cook said in his most detailed comments to date on Apple’s plans in the car space. “It’s probably one of the most difficult A.I. projects actually to work on.”

Wall Street’s self-regulator blocks public scrutiny of firms with tainted brokers (Rueters)
At Long Island-based Joseph Stone Capital, 71 percent of the firms’ 59 brokers had FINRA flags on their records. Joseph Stone was investigated by the state of Montana after one of its sales representatives, Lawrence Sullivan, cold-called Patrick Navarro, an employee at the office of Montana’s Commissioner of Securities and Insurance. [...] During the call, Sullivan pitched Navarro on an investment in Paypal stock, the report said. After Navarro informed Sullivan that he worked for the state’s securities regulator, Sullivan blurted out “Happy New Year!” and hung up.

SoFi has applied for a bank charter (TechCrunnch)
The company has a long way to go if it’s actually going to become a bank, and it’s facing an uphill battle. That’s because there haven’t been any new industrial loan company (ILC) charters approved in about a decade.

U.S. Lawsuit Links $2.2 Billion Deal to Malaysian 1MDB Scandal (WSJ)
U.S. authorities are investigating the $2.2 billion purchase of a U.S. energy company by a Middle Eastern government investment fund that was arranged by Goldman Sachs Group Inc. GS -0.24% and netted one investor a $300 million windfall in less than a week, according to a government lawsuit and people familiar with the investigation.

Just Five Stocks Account for Nearly 75% of the Nasdaq's Plunge (BBG)
This selloff was “way overdue given the extreme out-performance and positioning in technology shares,” Morgan Stanley analyst Michael Wilson wrote in a note to clients Monday, Shares of Apple, for instance, are still up 25 percent this year, giving them room to fall. But while Wilson expects the drubbing to continue in the short-term, he doesn’t think the market has seen a peak in tech shares. “We would be surprised if this is the end for technology stocks given the very strong earnings growth we are witnessing,” he wrote.

A Series Of Rolling Mini-Bubbles (Macro Tourist)
As ugly as the Nasdaq looked on Friday, it didn’t reflect a systemic collapse in equities, but the shaking out of yet another hedge fund induced mini-bubble. I have seen this scenario play over time and time again. The trades the hedge funds are most enthusiastic about, are the very ones you should avoid the most.

Bitcoin Is Helping the Pot Business Get Over Its Banking Problem (BBG)
“There’s no industry -- whether it’s the production and sale of cannabis or the production and sale of a cup of coffee -- that can operate safely, transparently or effectively without access to banks or other financial institutions and traditional services,” said Jon Baugher, co-founder of POSaBIT, whose technology is used by 30 dispensaries in Washington state. “That’s where we thought we could leverage the use of digital currency.”

Potcoin sponsoring Rodman’s North Korea trip (AP)
A cryptocurrency for legalized marijuana is sponsoring former NBA star Dennis Rodman’s latest trip to North Korea. Rodman tweeted Tuesday “I’m back! Thanks to my sponsor Potcoin.com” with a photo of himself holding an itinerary from the North Korean airline Air Koryo.

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J.P. Morgan’s Investor Day: Cut That Headcount (Deal Journal) JP Morgan is looking to cut another $1 billion out of its expenses this year, including somewhere around 4,000 jobs, according to a new presentation...And that may not be all the cuts. In a separate presentation on the consumer bank and mortgage operations the bank expects to cut costs in mortgage banking by $3 billion over this year and next year and cut headcount there by between 13,000 and 15,000. Banks Face Hurdle In Libor Fight (WSJ) Next week, lawyers for Barclays PLC, Royal Bank of Scotland Group PLC, UBS AG and more than a dozen other banks still under investigation are expected to ask a federal-court judge to throw out many of the suits, which seek class-action status. The suits, filed in civil court in California and New York by plaintiffs ranging from a retired cable-car driver in San Francisco to the city of Baltimore, have been piling up for nearly two years. They seek damages that could reach into the tens of billions of dollars from financial institutions that help determine the London interbank offered rate, or Libor. Barclays, RBS and UBS already have paid about $2.5 billion, and admitted wrongdoing, to settle rate-rigging allegations by U.S. and U.K. regulators. In court filings, lawyers for the 16 banks accused of wrongdoing say the lawsuits have no legal validity. The lawyers say regulatory settlements reached so far don't support the central allegation in most of the civil suits that banks engaged in illegal, anticompetitive behavior. Berlusconi Concedes as He Weighs Alliance (Bloomberg) Former Italian Prime Minister Silvio Berlusconi acknowledged rival Pier Luigi Bersani’s narrow victory in the lower house of Parliament and said he’s open to a broad alliance to avoid a second election. “Everyone needs to think what good can be done for Italy and this will take some time,” Berlusconi said in an interview with Canale 5, a station owned by his Mediaset SpA broadcaster. The country can’t be left without a government, he said. Lew gettin’ close: Senate panel to OK as next Treasury boss (NYP) Treasury Secretary-nominee Jack Lew will get the green light to replace Tim Geithner despite taking heat during and after his confirmation hearing over a loan he received from New York University. The 57-year-old former White House chief of staff has enough votes from the Senate Finance Committee, headed by Max Baucus (D-Mont.), to pass a vote today that will likely lead to his confirmation, sources said. A full Senate vote is likely to be scheduled in a couple of days and held sometime next week. Larry Summers: Sequestration 'Meat Cleaver' Is Irresponsible (CNBC) Avoiding the "sequester" is "round three" in the debt-reduction debate, former Clinton Treasury Secretary Lawrence Summers told CNBC Tuesday, arguing for a "balanced approach" because President Barack Obama has agreed to more spending cuts than revenue during the process. In a "Squawk Box" interview, Summers said the funding constraints of the Budget Control Act of 2011 — which resolved that year's debt ceiling crisis — were round one. "You had spending cuts that were far larger from the discretionary side, that were far larger than anything [on revenue] that happened in December. Right now, we're way in balance toward more spending cuts." Dominique Strauss-Kahn seeks to ban 'half-man half-pig' book (Telegraph) The "biographical novel" by Marcela Iacub, a lawyer and journalist, recounts her seven-month affair with the 64-year-old Mr Strauss-Kahn last year. It is due to be published on Wednesday under the title, Belle et Bête, or Beauty and Beast. But the one-time Socialist presidential hopeful will this morning seek to have the book banned for "violation of the intimacy of private life" and the author and her publisher fined 100,000 euros (£88,000) in damages...In the work, she claims Mr Strauss-Kahn would have transformed the Elysée Palace into a "giant swingers' club" had he been elected French president. In fresh accounts by those who have read the book yesterday, the last chapter narrates the pair's final encounter, ending in Miss Iacub receiving treatment in casualty after "the pig" left her with an "eaten ear". 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Yahoo’s Mayer Risks Productivity With Work-From-Home Restriction (Bloomberg) Jackie Reses, Yahoo’s executive vice president of people and development, sent a memo last week asking employees with work-from-home arrangements to make their way to the company’s offices, starting June. “To become the absolute best place to work, communication and collaboration will be important, so we need to be working side-by-side,” according to the memo, whose contents were confirmed by a Yahoo employee who asked not to be identified because it’s not a public document. “Speed and quality are often sacrificed when we work from home.” At a time when Mayer is under pressure to jump-start growth and create innovative products, the shift may compromise Yahoo’s ability to attract employees seeking the freedom to work outside the office -- a perk offered by many of the company’s competitors. Research suggests that working from home enhances productivity, said Jody Thompson, co-founder of workforce consultant CultureRx. BP Oil-Spill Trial Begins (WSJ) Both Transocean and the Justice Department focused part of their opening statements on a 10-minute ship-to-shore phone call between two BP engineers, Donald Vidrine and Mark Hafle, less than an hour before the blast. From the rig, Mr. Vidrine allegedly talked about unusual results from a test designed to ensure the cement sealing in the bottom of the well was successful. Investigators later found that rig workers misinterpreted the results of the test. Dennis Rodman Bound For North Korea (Reuters) Retired U.S. basketball player Dennis Rodman is to visit North Korea to film a television documentary and will arrive in the capital Pyongyang on Tuesday, the Associated Press reported. Rodman, now 51 years old, won five NBA championships in his prime, achieving a mix of fame and notoriety for his on- and off-court antics. 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