Herbalife has a plan that could squeeze hedge fund billionaire Bill Ackman (BI)
Once the number of Herbalife shares available to be loaned plummets following the auction, the cost to borrow the company's stock will "increase dramatically" from around 2% into the 10% to 40% area, according to S3. So to what extent will that hurt Ackman's wallet? He currently pays about $63,000 a day in financing costs, but that could skyrocket to $300,000 to $1.2 million a day once the auction is complete, S3 says. Long story short, the Dutch auction will hit Ackman from two angles: loan recalls and financing costs.
Wall Street Banks Warn Winter Is Coming as Business Cycle Peaks (BBG)
Oxford Economics Ltd. macro strategist Gaurav Saroliya points to another red flag for U.S. equity bulls. The gross value-added of non-financial companies after inflation -- a measure of the value of goods after adjusting for the costs of production -- is now negative on a year-on-year basis. “The cycle of real corporate profits has turned enough to be a potential source of concern in the next four quarters,” he said in an interview. “That, along with the most expensive equity valuations among major markets, should worry investors in U.S. stocks.”
Octogenarians Rule the Rich (BBG)
Six of the 25 richest Americans are over 80, according to the Bloomberg Billionaires Index. Carl Icahn and Charles Koch, for example, are 81. Earlier this month, Sheldon Adelson turned 84 and George Soros hit 87. Warren Buffett, the fourth-richest person in the world, with a net worth of $77 billion, celebrates his 87th birthday next week. [...] While people over 80 make up only 3.7 percent of the population, the IRS estimates they control a larger share of the nation's top fortunes than people under 50.
Police find illegal Bitcoin farm at Ukrainian state institute (Kyiv Post)
Police tracked down the allegedly illegal bitcoin producer with the help of an SBU security service agent, who “found out the exact location of illegal hardware that was secretly generating digital money, which was later used via payment systems that are unauthorized in Ukraine.” The court claims the suspects had no rights to use the state premises – a swimming pool.
With alumni in the White House, Goldman sees an opening (FT)
Only Congress could repeal the Volcker rule, and that is politically improbable. But there is a backdoor route for lawmakers to help Goldman. It would entail slipping Dodd-Frank changes into an end-of-year spending bill. Two people close to Goldman say it is evaluating its options. “We have our Christmas wishlist, but what can you actually get for the kids under the tree?” says one.
Blue Apron shareholders file lawsuits alleging investors were misled (Venture Beat)
In particular, the complaints revolve around allegations that Blue Apron did not disclose delays at a new fulfillment center in New Jersey, which the company disclosed when it reported earnings earlier this month. The complaint also alleges that Blue Apron was aware of Amazon’s plans to enter the meal-delivery business and that the company didn’t warn of a planned decrease in ad spending in the second half of 2017, which could drag down its revenue growth.
Mutual Funds Mark Down Uber Investments by Up to 15% (WSJ)
Vanguard Group, Principal and Hartford Funds all marked down their shares by 15% to $41.46 a share for the quarter ended June 30, according to the fund companies’ latest disclosure documents. T. Rowe Price Group Inc. cut the estimated price of its Uber shares by about 12% to $42.70 for the same period. [...] Seven mutual-fund companies had mostly maintained a $48.77 share price since the fourth quarter of 2015, when Uber first sold its shares to investors at that price.
Academic Research Insight: Abusing ETFs (Alpha Architect)
ETFs do not improve portfolio performance of ETF users. Rather, compared to the non-ETFs part of the portfolio, total performance decreases by -1.16% on average. [...] By using counterfactual portfolio analysis, the authors turn off “timing” and “security selection” behaviors. They find that, out of the -1.16% drop in performance, 0.77% comes from poor timing abilities (and cannot be related to additional trading costs). Similarly, when they compared the results of the total average portfolio with a portfolio invested in a market portfolio buy & hold strategy (proxy for security selection), they find that the majority of underperformance comes from security selection behavior.
Piglets Saved From Blaze Are Served Up To The Firefighters Who Rescued Them (HuffPo)
Rachel Rivers this week treated crew members at Pewsey Fire Station to a batch of sausages which were made from the very animals they had rescued from the fire at her farm in Milton Lilbourne, Wiltshire, in February. “I wanted to thank them,” Rivers told the BBC. “I promised them at the time I’d bring down some sausages for them, which they were all pleased about.” Rivers admitted that vegetarians were likely to “hate this.” But she added, “We farm and this is what we do. You can’t keep them as pets.”