Opening Bell: 7.20.17

Goldman is losing ground to Morgan Stanley; John Cryan sees a hard Brexit coming; doctors found 27 contact lenses in some lady's eye; and more.
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Morgan Stanley, Goldman Earnings Highlight Firms’ Diverging Paths Since Crisis (WSJ)
Last year, Mr. Gorman and top lieutenant Colm Kelleher, a former trading chief, fired 25% of fixed-income traders and slashed the capital available to the unit for bets. Still, that division—which trades everything from corporate bonds to oil to interest-rate swaps—has kept revenue from falling sharply. It has made more than $1 billion in revenue for five straight quarters, hitting a goal Mr. Gorman set last year.

Goldman Partners Mark End of Era as Stock Holding Drops Below 5% (BBG)
After departures and personal stock sales, the stake held by bank’s most senior rank slipped to 4.79 percent as of July 3, according to a regulatory filing Wednesday. That’s down from 5.65 percent in late January -- and from more than 60 percent after the firm’s initial public offering in May 1999. Periodic filings have shown for years that their holding has been gradually shrinking, and as long as it’s below 5 percent, the bank isn’t required to provide updates.

Goldman Sachs is on a hiring spree to become the Google of Wall Street (BI)
The New York-based financial services giant is hiring for Marquee, a platform that provides clients access to the bank's analytics, data, content and execution capabilities via a browser or an API. The bank is looking for talent to fill positions in its New York office, spanning from associate developer to vice president. The bank has posted eight job ads for roles relating to Marquee in New York in the past month or so, and has also recently advertised a further 12 roles in Bengalaru and four in Warsaw.

Evan Spiegel is finally having sex with Miranda Kerr, and Snap investors are furious (PageSix)
One incensed Snap investor told Page Six, “Where are the shareholders’ yachts? Evan is chilling on the coast while Snap burns under Facebook competition. He’s feasting on Italian delicacies while shareholders starve. ‘Let them eat losses!’ ”

Deutsche Bank Preparing for Hard Brexit, CEO Cryan Tells Employees (BBG)
Deutsche Bank AG is preparing for a hard Brexit and will probably book the “vast majority” of its assets in Frankfurt, Chief Executive Officer John Cryan tells employees in a videotaped message. “There’s an awful lot of detail to be ironed out and agreed; depending on what the rules and regulations turn out to be, we will try to minimize disruption for our clients and for our own people,” Cryan says in the video. “But inevitably roles will need to be either moved or at least added in Frankfurt.”

Saudi Aramco IPO will leave fund industry with no place to hide (FT)
At the very least, investors will have to decide whether to buy Saudi Aramco in addition to energy groups BP and Shell, or instead. Anyone paid to pick stocks or manage money will be required to have a view on succession in the House of Saud, the effect exports of US shale oil have on prices, and where dividends to shareholders rank in the priorities of a nation state.

Former Employee Testifies Shkreli Threatened Him and His Family (NYT)
Mr. Pierotti joined Mr. Shkreli’s hedge fund, MSMB, in August 2011, to start a consumer fund. With Mr. Shkreli’s blessing, he testified, he put all of MSMB Consumer��s money into one stock, Rick’s Cabaret, a chain of strip clubs. “One day, Martin came in and said, I want it all sold today; I need the money,” Mr. Pierotti testified. Mr. Pierotti liquidated the fund, he said. Soon after, when Mr. Pierotti walked into the MSMB offices, he saw “guys were packing computers and the flat screens into, like, rolling suitcases,” he said. “The bills had not been paid.”

Return On Equity At Record Low (Ritholtz)
The all-time highs we are seeing in equity valuations is having a significant impact on corporates. One distinct feature of this rally is the steady decline in the return on equity, as seen in the flow of funds data. Return on equity in corporate America is currently at the lowest level since World War II.

Doctors Remove 27 Contact Lenses From Woman’s Eye (HuffPo)
As bad as it sounds to have 17 lenses stuck together in your eye, specialist trainee ophthalmologist Rupal Morjaria told the website that doctors eventually found an additional 10 individual contact lenses in the same eye. All of the lenses were monthly disposable contacts that the woman had forgotten about, Optometry Today reported. “We were really surprised that the patient didn’t notice it because it would cause quite a lot of irritation while it was sitting there,” Morjaria said.

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Opening Bell: 4.19.17

Morgan Stanley does victory lap around Goldman; Treasury Department wants your opinion on century bonds; which emoji makes the best sex toy?; and more.

Opening Bell: 08.07.12

Probe May Hit UK Bank's Clean Image (WSJ) Last week, Standard Chartered PLC Chief Executive Peter Sands told analysts that "our culture and values are our first and last line of defense." On Tuesday, allegations by a New York financial regulator that Standard Chartered hid illegal Iranian transactions seemed to breach that line, sending the lender's shares down and wiping £7.65 billion ($11.9 billion) off its market value. In the U.K., Mr. Sands has long been heralded as a voice of reason in the country's turbulent banking sector. The former consultant, who was named Standard Chartered CEO in 2006, regularly espoused the importance of sound governance and sensible investment. While several of its British peers were being bailed out by taxpayers, Mr. Sands was guiding the Asia-focused bank to record profits boosted by growing trade between emerging nations. The executive stressed the fact that Standard Chartered doesn't have an investment bank and didn't need European Central Bank cheap loans to keep its business ticking over. Italian's Job: Premier Talks Tough in Bid to Save Euro (WSJ) During an all-night European summit in June, Mario Monti, the Italian prime minister, gave German Chancellor Angela Merkel an unexpected ultimatum: He would block all deals until she agreed to take action against Italy's and Spain's rising borrowing costs. Ms. Merkel, who has held most of the euro's cards for the past two years, wasn't used to being put on the defensive. "This is not helpful, Mario," Ms. Merkel warned, according to people present. Europe's leaders were gathered on the fifth floor of the European Union's boxy glass headquarters in Brussels, about to break for dinner. "I know," Italy's premier replied. Bill Gross: Stay Away From Europe (CNBC) “Investors get distracted by the hundreds of billions of euros in sovereign policy checks, promises that make for media headlines but forget it’s their trillions that are the real objective,” Gross wrote. “Even Mr Hollande in left-leaning France recognizes that the private sector is critical for future growth in the EU. He knows that, without its partnership, a one-sided funding via state-controlled banks and central banks will inevitably lead to high debt-to-GDP ratios and a downhill vicious cycle of recession.” “Psst…investors: Stay dry my friends!” Gross said. Richest Family Offices Seeing Fastest Growth As Firms Oust Banks (Bloomberg Markets) They call it “money camp.” Twice a week, 6- to 11-year-old scions of wealthy families take classes on being rich. They compete to corner commodities markets in Pit, the raucous Parker Brothers card game, and take part in a workshop called “business in a box,” examining products that aren’t obvious gold mines, such as the packaging on Apple Inc.’s iPhone rather than the phone itself. It’s all part of managing money for the wealthiest families, says Katherine Lintz, founder of Clayton, Missouri- based Financial Management Partners, which runs the camp for the children of clients. Supplying the families with good stock picks and a wily tax strategy isn’t enough anymore. These days, it’s about applying the human touch, she says. Lintz, 58, is on to something. Her 22-year-old firm was No. 2 among the fastest-growing multifamily offices in the second annual Bloomberg Markets ranking of companies that manage affairs for dynastic clans, Bloomberg Markets magazine reports in its September issue. The assets that FMP supervises grew 30 percent to $2.6 billion as of Dec. 31, just behind Signature, a Norfolk, Virginia-based family office that expanded 36 percent in 2011 to $3.6 billion. MS Takes Trading Hit (NYP) Morgan Stanley, which had the largest trading-revenue drop among major US banks last quarter, lost money in that business on 15 days in the period, up from eight days a year earlier. Morgan Stanley traders generated more than $100 million on three days in the period, compared with seven days in the second quarter of 2011, the company said in a regulatory filing yesterday. None of the daily losses exceeded the firm’s value-at-risk, a measure of how much the bank estimates it could lose on 95 percent of days. Morgan Stanley had a 48 percent year-over-year decrease in trading revenue, excluding accounting gains, led by a 60 percent drop in fixed-income revenue. Former Lloyds Digital Security Chief Admits $3.76 Million Fraud (Bloomberg) Lloyds Banking Group's former head of digital banking fraud and security pleaded guilty to submitting false invoices totaling more than 2.4 million pounds ($3.76 million)...Jessica Harper admitted to submitting fake invoices between 2007 and 2011 and then laundering the proceeds, the CPS said. She will be sentenced on Sept. 21, and faces as long as 24 years in prison for the two charges, a CPS spokesman said, although she will get credit for the guilty plea. Ex Lehman Exec Requests Rehab To Avoid Jail Time (NYP) Former Lehman Brothers Co-Chief Operating Officer Bradley H. Jack, arrested twice in less than a year on charges of prescription forgery, said he is willing to undergo a program for drug and alcohol treatment to avoid prosecution. Jack applied for the program at a hearing yesterday in Connecticut Superior Court in Norwalk. Judge Bruce Hudock ordered a doctor’s report to determine if he is eligible for the new program, which the judge said would be “a rare event.” Fed Official Calls For Bond Buying (WSJ) Eric Rosengren, president of the Federal Reserve Bank of Boston, called on the Fed to launch an aggressive, open-ended bond buying program that the central bank would continue until economic growth picks up and unemployment starts falling again. His call came in an interview with The Wall Street Journal, the first since the central bank signaled last week that it was leaning strongly toward taking new measures to support economic growth. Mr. Rosengren isn't currently among the regional Fed bank presidents with a vote on monetary policy. Although all 12 presidents participate in Fed deliberations, only five join the seven Fed governors in Washington in the formal committee vote. Tokyo Exchange Glitch Halts Derivatives Trading (WSJ) The Tokyo Stock Exchange on Tuesday temporarily suspended all derivatives trading soon after the morning open due to an unidentified system problem, the second significant trading glitch on the exchange this year. Amazon Exec Swindled By Tom Petty Con Artist (NYDN) Brian Valentine simply wanted to give his wife the wedding present of a lifetime - a performance by Tom Petty and the Heartbreakers. The senior vice president of Amazon, instead, fell victim to fraud, losing a whopping $165,000 to a Las Vegas man who pretended to be a concert booking agent, the Smoking Gun reported. FBI agents arrested the fraudulent agent, Chad Christopher Lund, on Aug. 2 in Illinois, after a private investigator Valentine had hired found that Lund had skipped town. But the ordeal began almost ten months before in late 2011, a year after Valentine, 52, popped the question to fellow Amazon employee, Gianna Puerini, 39, according to a wire fraud complaint unsealed by the U.S. District Court. Valentine decided that he wanted the "Won't Back Down" singer to perform a set at the couple's wedding reception since he proposed to Puerini at a Petty concert in Seattle. He turned to the Internet, where he found the website of Lund's firm, lundlive.com, boasting to have booked acts like Petty, Run-DMC and Ludacris. Lundlive.com no longer exists. Valentine connected with Lund over email and by October 2011, Lund told the Amazon exec that he had negotiated with Petty's representatives "down to a price of $330,000 for the performance." Later in the month, Lund sent Valentine a contract with the forged signature of Petty's manager, Tony Dimitraides. Valentine sent Lund a $165,000 down payment in return. Valentine finally uncovered the fraud in early April 2012, when the wedding was just three months away. He contacted Petty's management to discuss the performance only to find out that they had no idea about the planned appearance. "We have never heard of Chris Lund or his agency," Dimitraides wrote in an email to Valentine. "We are not aware of any deal for Tom Petty to play Seattle in July and I have never signed a contract for any such." "It looks like you have been defrauded."