Madoff Clients Fighting for Fortunes Get Help - From the Con Man (BBG)
From his federal lockup in Butner, North Carolina, Madoff said at a recent deposition he was a legitimate securities broker for decades, until 1992. Before that, he said, he was mostly clean as a whistle. Madoff made a similar claim in his guilty plea eight years ago, but the issue hasn’t really mattered until now. It’s become crucial to resolving some 80 lawsuits in which Irving Picard, the trustee appointed to handle the firm’s dissolution, is seeking about $100 million in profits from a group of customers who invested before 1992. The central issue is when the fraud started. If it began after 1992, those customers may get to keep their profit. If it started before, they lose out.
Nobody Is Perfect’: Some Uber Employees Balk at Travis Kalanick’s Exit (NYT)
Starting late Wednesday, Uber employees circulated a petition asking the company’s board of directors to bring back Mr. Kalanick in an active role. More than 1,000 employees clicked to support Mr. Kalanick’s return in that capacity. In addition, Uber workers took to social media to express their dismay at the departure of Mr. Kalanick, who helped found Uber and made it a transportation behemoth. “He worked day and night in creating this company to what it is today,” the petition said.
Can Uber ever make money? (FT)
“There is no clear pathway I can see for Uber to go from a high-revenue growth company to a profitable company,” says Aswath Damodaran, a professor of finance at the Stern School of Business. “Normally the story for start-ups is that as revenues grow economies of scale will kick in, but that story is tough to tell with Uber.”
Where Bezos Leads, Amazon Shareholders Blindly Follow (WSJ)
In many ways, Amazon is an exemplar for investors. In most companies, shareholders should encourage more R&D spending, worry less about quarterly targets and tell managers to focus on the business, not the share price. In Amazon’s case, the willingness to accept no explanation at all for a $13.7 billion purchase suggests faith has run too far.
Deutsche Bank unexpectedly pulled an offer to hire a top executive at the last minute (BI)
Rob Allard, a former Deutsche Bank executive who ran the structured product sales team before moving to Goldman Sachs in 2008, was due to join the bank as head of US fixed-income sales. He was set to replace John Gallo in that role. However, the job offer has since been rescinded, according to three people who did not want to be identified discussing the matter. It's unclear why, they said.
Walk it Back, Random Walker (PragCap)
Big news, nerds – Burton Malkiel has changed his mind. The investment legend, who has spent his entire life chastising alpha chasing active management, has moved over to the dark side. Malkiel, the Chief Investment Officer at Wealthfront has rolled out a new strategy that they’re calling “Passive Plus” indexing. The strategy is another name for Smart Beta which is another name for active deviations from market cap weighting. This is a big change in views considering he said this just a few years ago: “‘Smart Beta’ portfolios are more a testament to smart marketing rather than smart investing.”
Could the Rise of ‘Smart Beta’ Create Fragile Markets? (WSJ)
“The financial stability concern, which at this point is largely theoretical, is that these rules could unintentionally engender mechanical herding. In particular, if decision rules are derived from changes in market conditions, and the resulting portfolio reallocations then affect market conditions, then a feedback loop of self-fulfilling behaviors without human judgment is generated... A rule that replaces high volatility stocks with low volatility stocks could, during a period of financial market stress, exacerbate the volatility of certain securities.”
D.C. Takes a Break for Senate Testimony (PornHub Blog [sfw])
James Comey’s testimony began at 10am ET on June 8th, and compared to an average Thursday, traffic in the Washington D.C. region was down 10.1%. Traffic to Pornhub remained well below average until Noon hour, when it had a quick recovery and remained near normal levels for the rest of the day.