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Opening Bell: 8.30.17

Goldman Sachs wants to boost trading by tearing down Chinese walls; Warren Buffett leans into BofA stake; map app tries to kill biker by sending him into Lincoln Tunnel; and more.
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Under investor pressure, Goldman to explain trading strategy (Reuters)
Executives including securities group co-head Pablo Salame have been meeting privately with investors and analysts to assuage concerns, the sources said. The executives have explained how Goldman is trying to get investment bankers and traders to generate more revenue by working more closely together, sources familiar with the conversations said.

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Hedge Funds Near-Record Momentum Bets Keep Coming Up Winners (BBG)
“It’s like these things are like gold -- it’s almost like a safe haven,” said Mark Connors, the global head of risk advisory at Credit Suisse Group AG. “This resilient price action in equities is commensurate with the constructive positioning we see across hedge fund strategies and speaks to the persistent positive sentiment in 2017.”

It’s Official: Warren Buffett Made About $13 Billion on Bank of America Deal (WSJ)
Berkshire’s exercise of the warrants, along with dividends the company has received on Bank of America preferred stock, brings its paper gain on its investment in the bank to around $13 billion. “Berkshire is going to keep every share for a very long time,” Mr. Buffett said in an email to the Journal Tuesday.

Crypto-bailouts for struggling startups (FT Alphaville)
So what does a chief executive do when things grind to a halt? Well, she or he either kick-starts growth; pulls a dramatic pivot out of the hat; finds someone dumb enough to acquire the company; or prepares for the slow or fast decline of the business. But now there’s another option: an initial coin offering (ICO), which lets you raise money from the public without having to sell any equity and dilute your existing shareholders. One startup heading down this path is Kik, a messaging app that has raised $120m from investors like Tencent and Union Square Ventures since its launch in 2010.

The mysterious rise in shares of the Swiss National Bank (FT)
There is a more straightforward explanation, however, for why SNB shares have become more attractive, leading to a higher price. SNB shares should be regarded, not as equity stakes, but as an alternative to ultra-safe government bonds, says Alexander Koch, economist at Raiffeisen bank. Given central banks cannot go bankrupt — they control money creation — a share in the SNB is like a perpetual bond with a fixed coupon. At a price of around SFr3,000 the yield is only about 0.5 per cent — but that still compares favourably with the yield on a 10-year Swiss government bond, currently about minus 0.15 per cent.

Google Critic Ousted From Think Tank Funded by the Tech Giant (NYT)
“We are in the process of trying to expand our relationship with Google on some absolutely key points,” Ms. Slaughter wrote in an email to Mr. Lynn, urging him to “just THINK about how you are imperiling funding for others.”

Traders are no longer impressed by the biggest driver of stock market gains (BI)
In the second quarter, a company beating expectations only saw a 0.3% share-price gain over the following three days, according to data compiled by Morgan Stanley. The picture was even worse for companies that beat sales forecasts. Their stocks remained flat over that period.

Stocks Are Fundamentally Sound (Yardeni)
The Fundamental Stock Market Indicator (FSMI) rose to a new record high during the week of August 19. It has been very highly correlated with the S&P 500 since 2000. The FSMI isn’t a leading index of the S&P 500. Nothing leads the S&P 500, since it is a leading indicator itself, and is one of the 10 components of the Conference Board’s Index of Leading Economic Indicators. My indicator simply confirms or raises doubts about the underlying trend in the stock market. Its new high certainly confirms that the bullish trend in stocks remains intact.

CITI: Retail jobs will 'vanish' due to technology and it 'will affect every city and region' (BI)
The disappearance of factory jobs has led to the devastation of many communities in areas like the so-called "rust belt" of the US but Benedikt Frey says the decline of retail jobs is likely to felt much more widely. "Unlike manufacturing jobs which are highly concentrated, the downfall of retail employment will affect every city and region," Benedikt Frey writes.

Man on bicycle rides through Lincoln Tunnel, blames phone app (NJ.com)
The man, a 26-year-old Jersey City resident who was delivering food, was intercepted by Port Authority police on the New Jersey side of the tunnel around 7:30 p.m. He explained to officers how he came to be in the tunnel and showed them the app, "which supported his claim," Pentangelo said.

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'The Rent is Too Damn High' guy is running for mayor, has an anthem to prove it (NYP, AnimalNY) McMillan has thrown his hat into the ring for the 2013 New York City mayoral race with a musicalanthem and accompanying YouTube video. "Jimmy McMillan, the political candidate whose slogan represents the one issue that all New Yorkers can agree on–that the rent is too damn high–is running for mayor," says Animal New York in the introduction to the video. "It's been two long years since I been on the scene, now I'm back in the game looking mean and lean," McMillan sings in the video. "The race may be different but the message is the same, R.I.T.D.H. is going to change the game!" "My mustache and haircut are too damn fly!"

Opening Bell

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Opening Bell

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IMF And World Bank Meetings End With Little Agreement (NYT) To be sure, the additional $430 billion in lending capacity contributed by developed economies like Japan, Britain, Saudi Arabia and South Korea was seen as a major achievement. The contributions came after I.M.F. economists determined that countries around the world might require up to $1 trillion in new loans because of the combined effects of the sovereign debt crisis in Europe and sluggish global economic growth. The I.M.F. agreed to raise about half that amount if Europe would raise the other half. But finance ministers are still at odds over the effect of debt reduction on economic growth. Geithner urges 'aggressive' action to fight financial crisis (DowJones) US Treasury secretary Timothy Geithner said Saturday that the eurozone needed stronger action from authorities, including the European Central Bank, to tame a potential deterioration in the debt crisis. "The success of the next phase of the crisis response will hinge on Europe's willingness and ability, together with the European Central Bank, to apply its tools and processes creatively, flexibly and aggressively to support countries as they implement reforms and stay ahead of markets," Geithner told the International Monetary Fund's policy steering committee. Hedge Fund Short-Sellers to Target Wal-Mart Mexico (Reuters) Hedge fund managers are bracing for selling pressure in shares of Wal-Mart Stores on Monday, but market experts said it is the retail giant's less visible Mexican unit that could be the more attractive target for short sellers. The New York Times reported on Saturday that Wal-Mart de Mexico, which is 69 percent owned by Wal-Mart Stories, had orchestrated a widespread bribery campaign in 2005 to win market dominance. The investigative article alleged that senior Wal-Mart executives knew about the matter and tried to cover it up. "I would not consider Wal-Mart shares expensive, but I definitely would not be a buyer at these levels in the 60s. I'm more interested in shorting the Mexico traded 'pure play,'" said private activist investor Daniel Yu, who has presciently shorted such stocks including Green Mountain Coffee Roasters and Sino-Forest. Wal-Mart said in a statement on Saturday that it was "deeply concerned" about the allegations in the Times report and began an investigation into its compliance with anti-bribery laws last autumn. MF Global Customers Press JPMorgan For Funds (WSJ) In a letter set to be sent to regulators and lawmakers on Monday, an MF Global customer group calls for J.P. Morgan to "return hundreds of millions of dollars in MF Global customer funds transferred" to J.P. Morgan in late October. The group, called the Commodity Customer Coalition, urged U.S. officials to "demand" that the New York bank "disgorge all MF Global customer property immediately." J.P. Morgan is cooperating with the ongoing investigation, has said it did nothing wrong and lost some of its own money in the Oct. 31 bankruptcy because it was a creditor of MF Global. Vietnam Funds Beat India, China in Attracting Investors (Bloomberg) Vietnam-focused stock funds became the only emerging market equity assets in Asia to lure investors every week this year as the nation’s benchmark index rose to an 11-month high, Emerging Portfolio Fund Research said. Table Hockey, on Ice Since Heyday in 1970s, Makes a Comeback (WSJ) Carter Campbell leaned over the stick-figure hockey players, loosening up his wrists and hopping from one foot to the other. The 14-year-old's cap was turned around. His iPod blared tunes from the classic-rock band Rush. Across from him, 35-year-old, No. 1 ranked table hockey champ Mark Sokolski hunched over his own players. "I'm gonna stomp this kid," Mr. Sokolski said. At stake was a slot in the elite eight of this year's Canadian Table Hockey Championships, the best-attended North American tournament that the game has seen in decades. Across the U.S. and Canada, a resurgence of table hockey is under way, drawing younger players and women to a sport that has long been the domain of older men in their basements reliving a game that hasn't been popular since they were kids. Global Crisis Not Over, China Reforms to Go On: Wen (Reuters) The global financial crisis is not over and technical innovation and investment will be key to sustaining what remains a "tortuous" recovery, Chinese Premier Wen Jiabao said on Sunday during a visit to Germany. Wen also said China, the world's biggest exporter and second largest economy, would press on with reforms aimed at creating better legal protection for foreign investors — a major concern for the growing number of German firms active in the country. 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That suspect, Karl Vanderwoude, says if the scene seemed implausible — that’s because it was. “I didn’t do it. I wasn’t even in the vicinity of these incidents,” he said in his first interview since his arrest. “It’s a case of mistaken identity.” The 26-year-old Bible-study leader’s nightmare began 10 days ago, when he left early from his job as an operations coordinator at a Flatiron District private equity firm because he felt sick. He was in his Park Slope apartment for about an hour when the doorbell rang. “I thought it was my roommate who had been locked out and forgot his keys, which has happened, so I go to answer the door,” he recalled. Instead, two NYPD detectives were standing in the threshold. “They’re like, ‘Are you Karl? May we speak with you?’"