Opening Bell: 8.15.17

Lloyd has 140 characters or so for Donald Trump; Jana looking to pull a Whole Foods with Blue Apron; Malcolm Gladwell takes contrarian stance on inane topic; and more.
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You're done here, hombres. (Getty Images)

(Getty Images)

Blankfein disses Trump yet again (NYP)
The Goldman Sachs boss on Sunday condemned Trump’s “equivalency” after the death of a counterprotester at a white nationalist rally in Charlottesville, Va. “Lincoln: ‘A house divided against itself cannot stand.’ Isolate those who try to separate us,” Blankfein chided Trump in a Monday morning tweet. “No equivalence w/ those who bring us together.”

U.S. Stock Buybacks Are Plunging (BBG)
Share repurchases by American companies this year are down 20 percent from this time a year ago, according to Societe Generale global head of quantitative strategy Andrew Lapthorne. "Perhaps over-leveraged U.S. companies have finally reached a limit on being able to borrow simply to support their own shares," writes Lapthorne. BUT ALSO: the y/y fall in buybacks reversed as of the start of Q3.

Junk Bonds of the Financial Crisis Were the Decade’s Biggest Winners (BBG)
If you’d bought European high-yield bonds the day the global financial crisis erupted, closed your eyes and held onto them through the unprecedented events of the following decade, you would now be sitting on a 100 percent return. On the other hand, if you’d put your money in most major commodities, other than gold, you would have lost 50 percent. The euro and European stocks would have handed you a loss, but most bond markets, U.S. stocks and the dollar would have been a good bet.

Goldman Adds Pay, Perks in Silicon Valley War for Tech Talent (BBG)
Prior to the changes, a beginning engineer in New York could expect to make a base salary of about $83,000, with a bonus of about $12,000, the website’s figures show. That would probably climb to more than $100,000, with a larger bonus under the new policy. “Our intent is to be competitive for the best talent,” Wiesel said. “If we have to change our package, we’ll change our package.” SEE ALSO: Goldman Tops Banks Betting on a New Type of Hedging

Goldman Sachs looks to invigorate its bond trading business (FT)
Goldman used to look down at such humdrum “flow” business, preferring instead to craft complex derivatives for hedge fund clients that would earn the bank big fees. But that is changing, according to people familiar with the revamp, as patchy activity among hedge funds has forced the bank to rethink its business mix. Also part of that effort: getting closer to the likes of Pimco and BlackRock, the mutual-fund groups which have recently benefited from huge inflows of client money in credit.

Japan’s ETF addiction stores up risk for the future (FT)
There was a time when a US president threatening “fire and fury” and footage of children practising nuclear drills might have hit the Nikkei 225 harder than a 2 per cent dip. But that was before the Bank of Japan’s addiction to ETFs. There is no enigma here. Last week, when Japanese investors might reasonably have taken fright, the BoJ unleashed a test launch of its own — a record-breaking grab of more than $2bn of Japanese equity ETFs in 52 hours.

Outraged in Private, Many C.E.O.s Fear the Wrath of the President (NYT)
When I asked one chief executive Monday morning why he had remained publicly silent, he told me: “Just look at what he did to Ken. I’m not sticking my head up.” Which, of course, is the reason he said I could not quote him by name.

Jana Takes Stake in Blue Apron (WSJ)
The activist hedge fund whose investment in Whole Foods Market Inc. catalyzed the natural grocer’s takeover by Amazon.com Inc. has taken a 2% stake in meal-kit maker Blue Apron Holdings. Jana disclosed the investment on Monday in a regulatory filing, sending Blue Apron shares up 5%.

Malcolm Gladwell Takes Surprising Stance Against McDonald’s Beloved French Fries (NYMag)
Before you rush out and declare him un-American, though, realize he means well. Gladwell opens the podcast by telling listeners that “McDonald’s betrayed me so many years ago” when it stopped frying potatoes in beef tallow, so his ultimate goal is to help the fries return to their former glory. But his personal vendetta is woven into the far more interesting story of Phil Sokolof, the drywall magnate who spent millions crusading against saturated fat and cholesterol, and convinced McDonald’s to swap the beef fat for vegetable oil.

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Obama Wins Re-Election With Romney Defeated In Key States (Bloomberg) Obama defeated Republican Mitt Romney, winning at least 303 electoral votes in yesterday’s election with 270 needed for the victory. With one state -- Florida -- yet to be decided, Romney had 206 electoral votes...Obama won the battleground states of Ohio, Virginia, Iowa, New Hampshire, Wisconsin, Nevada and Colorado. He also carried Pennsylvania, where Romney made an 11th-hour bid for support to try to derail the president’s drive for re-election. North Carolina was the only battleground Romney won. Romney Campaigns To The End (WSJ) Hours before Mitt Romney lost his six-year quest to win the presidency, he said he had prepared only one speech—a victory speech...Until the final hour, Mr. Romney and his aides expressed confidence that he would win. The candidate, who prefers data and metrics to chitchat, appeared to be caught off guard by the loss even though he trailed in polls in crucial battlegrounds such as Ohio. Triumph Of The Nerds: Nate Silver Wins In 50 States (Mashable) The Fivethirtyeight.com analyst, despite being pilloried by the pundits, outdid even his 2008 prediction. In that year, his mathematical model correctly called 49 out of 50 states, missing only Indiana (which went to Obama by 0.1%.) This year, according to all projections, Silver’s model has correctly predicted 50 out of 50 states. A last-minute flip for Florida, which finally went blue in Silver’s prediction on Monday night, helped him to a perfect game. Loser Ryan Also A Winner (NYP) The Republican vice-presidential hopeful hedged his bet by running for re-election to his congressional seat in Wisconsin — where last night, he was declared the winner for an eighth straight time. Goldman Partners Pocket $22 Million (WSJ) More than 30 executives, including Chief Executive Officer Lloyd C. Blankfein, recently cashed in stock options awarded in the afterglow of the company's initial public offering in 1999. According to a securities filing, the executives, all Goldman partners, pocketed a total of $21.8 million by exercising options and selling the underlying shares in the three days after the firm reported third-quarter results in mid-October. The options expire at the end of November, and cashing in produced instant profits because Goldman's share price is more than 50% higher than when the options were awarded in 2002. "By exercising 10-year-old options before they expired later this year, executives captured some of the value we have built for shareholders over that period," said a spokesman for the securities firm. In contrast, many of the executives' remaining options are worthless, at least for now, because they were granted from 2005 to 2008. The stock peaked in October 2007 at about $239, or 89% higher than Tuesday's closing price of $126.25 in New York Stock Exchange composite trading at 4 p.m. The biggest gain went to Michael S. Sherwood, a Goldman vice chairman and the firm's top executive in Europe, who received $5.2 million from exercising options on 115,211 shares. Mr. Blankfein collected $3.1 million, while departing Chief Financial Officer David A. Viniar got $2.3 million, the filing shows. JPMorgan Nears SEC Settlement (WSJ) JPMorgan is close to a settlement with the Securities and Exchange Commission that would end one probe into how the company's Bear Stearns Cos. unit packaged and sold home loans to investors, according to people familiar with the case. A pact with the nation's largest bank by assets would be the first tangible victory in a wide-ranging SEC investigation into Wall Street's sale of mortgage-backed securities before the onset of the financial crisis. Since 2010, the SEC has issued more than 300 subpoenas or document requests related to the probe and collected more than 30 million pages of documents, enforcement chief Robert Khuzami said earlier this year. 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Hopefully the House of Representatives can hold our country together for four more years…stay strong and never give up! House of Representatives shouldn’t give anything to Obama unless he terminates Obamacare.” And finally: “This election is a total sham and a travesty. We are not a democracy!” Fitch: No Fiscal Honeymoon For President Obama (CNBC) President Barack Obama will need to quickly secure agreement on avoiding the "fiscal cliff" and raising the debt ceiling following Tuesday's elections, Fitch Ratings said. The economic policy challenge facing the president is to put in place a credible deficit-reduction plan necessary to underpin economic recovery and confidence in the full faith and credit of the U.S., according to Fitch. Resolution of these fiscal policy choices would likely result in the U.S. retaining its triple-A status from Fitch, the firm said. Failure to avoid the so-called fiscal cliff and raise the debt ceiling in a timely manner, as well as securing agreement on credible deficit reduction, would likely result in a rating downgrade in 2013, Fitch said. The New Haven For Investors (WSJ) Treasurys have a new rival for safe-haven status: U.S. companies. Bonds of Exxon Mobil and Johnson & Johnson are trading with yields below those of comparable Treasurys, a sign that investors perceive them as a safer bet. It is a rare phenomenon that some market observers said could be the beginning of a new era for debt markets. It could ultimately mean some companies will borrow at lower rates than the U.S. government. Swiss, Greeks Begin Talks On Tax Deal (WSJ) Switzerland has begun formal talks on a deal to tax assets stashed in secret Swiss bank accounts by Greek citizens, in line with similar agreements struck with other European countries, the Swiss government said Wednesday. Woman Wearing MIT Shirt Nearly Banned From Voting In Boca Raton (BNN) A woman attempting to vote in West Boca Raton yesterday was initially prohibited from entering the polling place because she was wearing a t-shirt with the letters MIT. BocaNewsNow.com heard from multiple sources that an election supervisor at the polling place ultimately realized that MIT stands for “Massachusetts Institute of Technology” — a school where students tend to know how to spell — and was not a campaign shirt for the Republican candidate, who spells his name MITT. Campaigning is not permitted within several yards of a polling place. The woman was ultimately allowed to vote.

(Getty Images)

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