Opening Bell: 7.10.17

For Macro Managers, Micro Returns Cast Pall Over One-Time Stars (BBG)
“I felt the intensity of following markets at a time of increasing political and economic confusion very hard,” said Mark Spindel, founder of Potomac River Capital in Washington. “My entire career had centered on an understanding of monetary politics and I had trouble getting my head around it all. It was exhausting.”

Deutsche Sees Trouble Ahead for the World's ‘Frothy’ Stock Markets (BBG)
The average of the standard deviation of stock-market capitalization as a percentage of GDP in seven major developed countries has been approaching the previous peaks of 2000 and 2008, Matsuoka highlighted. The first sign of the 2008 crisis was a suspension of redemptions at a hedge fund. This time around, signs of a problem may include a deterioration in the quality of securitized U.S. auto loan products, and/or the deterioration of the financing of emerging market countries following U.S. interest rate rises, he said.

Plan for New Trading Pit Triggers Feud in U.S. Options Market (WSJ)
Nasdaq has filed three comment letters about its concerns. A main one is that a Box trading floor, if approved, could sit empty for a few months, potentially leading to worse prices for customers if not enough market makers are competing. Since trading firms take time to get new people trained and registered, Nasdaq argues that Box shouldn’t be allowed to open until the traders, known as “market makers,” are ready to participate. “Having an empty room would be completely contrary to the spirit of the trading floor,” said Kevin Kennedy, head of U.S. options at Nasdaq.

Most Camps Have S’mores, but This One Has Lessons on Finance and Trade (WSJ)
During an hourlong trade lesson, a group in the back corner took the opportunity to practice their best fake-flatulence noises. Over in the Netherlands, tensions were rising. One boy made off with all of the country’s metal, fruits and vegetables, sugar, electronics and textiles, leaving his fellow citizens with nothing to trade. “They won’t be quiet,” said Spencer, as the rest of his temporary countrymen—who dubbed themselves “The Weirdos”—dashed across the room to exchange their minerals for another country’s sugar. “Fidget, fidget, fidget,” said one camper who remained seated, clutching an orange fidget spinner as others scrambled to even out their country’s balance of trade.

How teachers, firemen and college endowments ended up enriching America's hedge fund billionaires (BI)
"Investment consultants are really the only link in the financial chain that has the ability to protect trustees of funds and endowments, who play a crucial role in protecting the pensions and healthcare of Americans," Harvard researcher Jay Youngdahl said in an interview with Business Insider. "They've utterly failed … What they've claimed to provide, they've been unable to provide."

There Is No Such Thing As A Bad Tick (Macro Tourist)
Somehow, and I am not sure of the exact details, the Japanese government is using precious metals as part of their monetary policy. Now they might be doing it through the Postal Service Pension plan (GPIF) - after all, they have openly admitted to the BoJ buying JGBs from the plan, and the postal service pension investing in foreign stocks with the proceeds. There might be some sort of similar arrangement with precious metals. Who knows? I certainly don’t, but I just don’t believe this tight relationship can be explained by chance.

Teen bit in head by bear wakes up to 'crunching sound' (AP)
The teen told KMGH-TV that the bear dragged him ten to 12 feet before he was able to free himself. "The crunching noise, I guess, was the teeth scraping against the skull as it dug in," said the teen, who teaches wilderness survival at the camp owned by the Rocky Mountain Conference of Seventh Day Adventists.

Action must be taken to stop quants exploiting weakness (FT)
A compelling case can be made that most of what goes wrong in asset pricing and asset management stems from managers and mutual funds being judged on their short-term performance against market indices or peer group returns. Tight tracking to market cap benchmarks obliges managers to chase bubbles, overpaying for high-risk stocks they do not like and selling low-risk ones they do like. This effect can be powerful enough on its own to explain the historic evidence that high-risk stocks deliver lower returns than low-risk ones.

Jawbone's demise a case of 'death by overfunding' in Silicon Valley (Reuters)
Jawbone's fall after raising more than $900 million provides a stark example of how the flood of cash pouring into Silicon Valley can have the perverse effect of sustaining companies that have no future, technology executives and financiers say. The irony is Jawbone could have been a suitable acquisition target some years ago, these people say, had it just kept its valuation lower by raising less money from venture capital and sovereign wealth funds.

Look At This Fucking Shit (Deadspin)
While the ad suggests DNA testing will magically enable your child to score sick golazos, the more realistic outcome is that a whole lot of kids who could have grown up enjoying sports will be turned away from them by a genetic report that reveals that they, like the overwhelming majority of humans on this planet, don’t possess superhuman genetic mutations that permit elite athletic success.