Opening Bell 8.9.17

Trump's "Fire and fury" threat rattles markets; But Not China's; The Mnook sold out for power; The Mooch is not powerful at all; Chinese restaurant offer bra-themed discount; And more!
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North Korea Worries Send Global Markets Lower [WSJ]
International markets bolstered by a lofty earnings season so far this summer were interrupted by a heightened risk of conflict between Washington and Pyongyang this week. Investors sought safety in precious metals, boosting gold by 0.9% to $1,274.30 a troy ounce.

A nuclear crisis is flaring in North Korea, and Chinese markets don't seem to care [CNBC]
The tough rhetoric puts China in a tough position: The world's second-largest economy has trade ties and shares a border with North Korea. And the U.S. has pressured China to squeeze North Korea more to back down on threats. But on Wednesday, China's stock markets were little changed in morning trading as investors largely ignored it all.

In the Age of Trump, the Dollar No Longer Seems a Sure Thing [NYT]
The dollar remains the dominant instrument for global trade, a role it is unlikely to surrender anytime soon. Yet those who trade in currencies see tentative signs that the dollar may be losing some status as markets grapple with the unorthodox actions of the man leading the nation printing the money.
Donald J. Trump’s presidency has been so full of departures from the norms of international relations that uncertainty has seeped into the calculation of America’s plans. That has subjected the dollar to additional skepticism, enhancing the fundamental factors pulling it down, from worries about the strength of the American economy to improved fortunes in Europe and Asia.

Mnuchin sold companies for $15 million to avoid ethics conflicts [CNN Money]
Mnuchin told officials in January that he would dump the assets within months of being confirmed to comply with federal ethics laws. The financial disclosure forms show that he sold interests in Dune Real Estate Partners, Dune Capital Partners, Dune Entertainment Partners and other companies in May.
It is impossible to know exactly how much Mnuchin made off the sales, because these documents only ask officeholders to disclose figures in ranges.

Shorting the short: Investors bet against Icahn's oil refiner after biofuel trade [Reuters]
The rising short interest in CVR comes as the company’s massive gamble on U.S. biofuels credits shows signs of going wrong.
The rising demand and limited supply for borrowed shares in CVR has triggered a spike in borrowing fees, from normal ranges of around 2 percent to nearly 19 percent this month, said Ihor Dusaniwsky, a managing director at financial analytics firm S3 Partners in New York. Its own tracking figures show short interest increased to about 6.7 percent of the available shares as of last week.

Blackstone Buys Billions in Spanish Real-Estate Assets [WSJ]
Blackstone said Tuesday it will take a 51% stake in a newly created company that will include approximately €30 billion ($35.2 billion) worth of real-estate assets transferred from Banco Popular and will also include the bank’s real-estate management company, called Aliseda.

The Mooch Tops A "50 Least Powerful People in the World" List [24/7 Wall St]
Over the nearly five decades that the position of the White House Director of Communications has existed, no tenure has been shorter than that of Anthony Scaramucci. Fired in late July 2017, less than two weeks after his appointment, the White House’s official reason for releasing Scaramucci was to give its new Chief of Staff, General John Kelly, a clean slate. Scaramucci’s tenure in Trump’s cabinet was tumultuous despite being short. The highlights included apparent protocol breaches with the FBI, conflicting statements about his relationship with then Chief of Staff Reince Priebus, and a profanity laced interview with The New Yorker, in which he spoke ill of several other Trump administration officials, including Priebus and Chief Strategist Steve Bannon. In the midst of his brief stint in the White House, Scaramucci’s wife filed for divorce.

Chinese Restaurant Offers Women Discounts Based On Their Bra Size [HuffPo]
According to the poster, women of all bra sizes would get some kind of discount at the eatery — though the percentage varied significantly. Women who wear A-cup bras would get a 5 percent discount, while G-cup wearers would get a 65 percent discount. (In China, discounts are expressed differently than in the U.S. The lower the number, the better the deal.)

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Opening Bell: 11.01.12

Wall Street Sputters Back To Life (WSJ) It wasn't until Mayor Michael Bloomberg and NYSE Euronext Chief Executive Officer Duncan Niederauer rang the opening bell that traders knew for sure that the systems would work. "Out of this postapocalyptic world that we're all looking at, that's a ray of good news, that they're actually able to get the exchange open," said Keith Bliss, senior vice president at Cuttone & Co., a brokerage with operations on the NYSE floor. Barclays Faces $435 Million Fine, Another Probe (WSJ) Barclays aced a double-barreled assault from U.S. authorities, as the federal energy-market regulator sought a record $435 million in penalties for the bank's alleged manipulation of U.S. electricity markets, and the lender also disclosed that it was facing a U.S. anticorruption investigation. The corruption investigation focuses on potential violations during the bank's efforts to raise money from Middle Eastern investors in the early days of the financial crisis. The probe, being conducted by the Justice Department and the Securities and Exchange Commission, is at an early stage. Wells Expands Into Investment Banking As Others Retreat (Reuters) The growth worries some investors who want the notoriously conservative bank to stick to its knitting, but Wells Fargo believes that now is a good time to hire. "Our eyes are wide open," said John Shrewsberry, head of the bank's investment banking and capital markets operations, known as Wells Fargo Securities. "There are a lot of very talented people at different stages of availability," he added in an interview this week. The fourth-largest U.S. bank says it can earn solid returns in investment banking while taking little risk for itself. It is focusing on services that its corporate lending customers need, such as stock and bond underwriting and merger advice. For investors, it is looking at areas like processing futures and swaps trades. The bank shies away from riskier undertakings like trading for its own account. The Wells Fargo Securities unit is relatively small now. It's biggest hub is in Charlotte, North Carolina, far from the storm that has hobbled Wall Street this week. In a few years, the unit could account for twice as much of the firm's revenue as it does now - an estimated 10 percent compared to its current five, Deutsche Bank analyst Matt O'Connor wrote in a report. Sandy's Economic Cost: Up To $50 Billion And Counting (CNBC) By contrast, the two costliest hurricanes in U.S. history to date were Katrina, with estimated losses of $146 billion, and Andrew, with loses estimated at $44 billion. But there are offsets and Moody's Mark Zandi and other economists note that there will be considerable rebuilding that will accompany the storm. Because the storm hit early in the quarter, Zandi points out that if $20 billion is spent cleaning up and rebuilding, the actual measured impact on gross domestic product could be zero. IHS Global Insight U.S. Economists Gregory Daco and Nigel Gault are doubtful. They note that the rebuilding often takes the place of investment elsewhere and often not everything is rebuilt. “The effect on growth for the fourth quarter will not be catastrophic but might still be noticeable, especially in an economy with little momentum anyway,” IHS wrote. The debate begs the question of whether such natural disasters can ultimately stimulate an economy. Eric Strobl, of the Ecole Polytechnique in Paris, who has studied the impact of hurricanes for more than a decade, found that hurricanes at the local level are usually negative for growth. NYC Struggles to Come Back to Life as Storm Chaos Lingers (Bloomberg) New York City struggled to return to normal life after superstorm Sandy, managing a partial resumption of mass transit amid a landscape of miles-long traffic jams, widespread blackouts and swarms of marooned residents. Limited service on the Metro-North and Long Island Rail Road commuter trains began today, and service on 14 of 23 subway lines will resume tomorrow, Governor Andrew Cuomo said at a news briefing in Manhattan. Still, power losses kept thousands of people and businesses in the dark and prevented trains from running below 34th Street in Manhattan. Basements and homes were waterlogged or submerged, and 6,300 remained in shelters...The lack of transit options is unprecedented, said Bernie Wagenblast, who has monitored metro traffic for more than 30 years, including stints as a radio reporter on WABC and WINS. “It reminds me a little of back in the ’70s when we had the gas crisis and cars were lined up for long, long distances trying to get gasoline,” Wagenblast said. “Now you’ve got cars in addition to people with their gas cans waiting on line who are trying to get fuel.” In Manhattan, an unofficial line divided the haves with power from the have-nots. South of about 34th Street, far fewer shops or restaurants than usual were open. Traffic lights were inoperable, though an unspoken etiquette emerged as many drivers took turns letting one another pass through intersections. Work was stopped at the Ground Zero construction site, which is still flooded. LaGuardia Airport, the only one of the three major New York-area airports that remains closed, can’t resume flights until floodwaters are drained and ground lights and equipment are checked. Labor Dept. Report on Jobs to Appear Friday as Planned (NYT) The hurricane had shut down government offices on Monday and Tuesday, and threatened to delay the release of the monthly jobs numbers. That led to hand-wringing in the presidential campaigns and even some accusations that the Obama administration might delay the numbers for its political benefit. But a Labor Department spokesman said Wednesday in an e-mail message that the report would come out as planned, at 8:30 a.m. E.S.T. on Friday. The Philadelphia 76ers unveil the world’s largest T-shirt cannon (YS) On opening night, the Sixers [unveiled] Big Bella, the world's largest T-shirt launcher that fires 100 tees in just 60 seconds. Big Bella weighs 600 pounds and, when firing T-shirts into the upper reaches of the Wells Fargo Center, can be up to 10 feet high. The team commissioned the creation of Big Bella from FX in Motion, an entertainment elements company out of New Berlin, Wisc. The team will also drop T-shirts, free game tickets and other promotional items from the rafters of the Wells Fargo Center down to fans below in a new themed "Sixers Parachute Drop." Australia Targets China’s Rich With “Millionaire” Visa (Deal Journal) Got 5 million Australian dollars (US$5.2 million) spare and need a residency visa? Australia’s doors will soon be open. From Nov. 24, Australia will accept applications under a new program, known as the Significant Investor Visa scheme, aimed at attracting the world’s wealthy to make the move and park their money Down Under. The only catch is that the A$5 million must be invested in state and territory Australian government debt, privately-owned Australian companies and managed funds that invest in Australian assets regulated by the Australian Securities & Investment Commission for four years. The new visa has already got financial advisers throughout Australia devising investment solutions for applicants. Consultants expect no shortage of takers especially from China, which is seeing an increasing flow of wealthy citizens sending money overseas, investing in assets as diverse as condos in Cyprus, or education for children overseas. A Wall Street Journal analysis of these flows suggests that in the 12 months through September, about US$225 billion headed out of China, equivalent to about 3% of the nation’s economic output last year. 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Opening Bell: 02.22.13

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"These hoes think they classy, well that's the class I'm skippen," read the suspect remark issued from @realDonaldTrump. It was a glaring non sequitur following tweets such as "Republicans must be careful with immigration—don't give our country away," and "Wow, Macy's numbers just in-Trump is doing better than ever — thanks for your great support!" "Yes, obviously the account has been hacked and we are looking for the perpetrator," Rhona Graff, senior vice president, assistant to the president of the Trump Organization, told NBC News via email. This confirmation was quickly echoed by Trump himself, in a tweet that read, "My Twitter has been seriously hacked — and we are looking for the perpetrators." UBS to Trade Equity Swaps in China in Structured-Product Push (Bloomberg) Chinese regulators last month decided to allow UBS to trade total return swaps, Thomas Fang, the bank’s managing director for equities derivatives sales for Asia, said in a phone interview. The bank will use the derivatives to create structured products tied to local stocks, with plans to boost the size of its staff in the country for the business, Fang said. The China Securities Regulatory Commission’s press office didn’t immediately respond to a faxed request for confirmation. A Tax That May Change The Trading Game (NYT) The tax would be tiny for investors who buy and hold, but could prove to be significant for traders who place millions of orders a day. Under the proposal, a trade of shares worth 10,000 euros would face a tax of one-tenth of 1 percent, or 10 euros. A trade of a derivative would face a tax of one-hundredth of 1 percent. But that tax would be applied to the notional value, which can be very large relative to the cost of the derivative. So a credit-default swap on 1 million euros of debt would have a tax of 100 euros, or about 0.4 percent of the annual premium on such a swap. 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The photo became public information when it showed up on the Facebook page for Johnson City, Tenn., news channel WJHL, where it was shared 2,000 times and received more than 700 comments. Once the news organization was able to determine its locational origin—the KFC on North Roan Street—the suspected employee was terminated. KFC spokesman Rick Maynard confirmed the firing but would not name the culprit because that "wouldn't be appropriate." He stressed that the employee who took the photos is no longer with the company. "Nothing is more important to KFC than food safety," he wrote to WJHL. "As soon as our franchisee became aware of the issue, immediate action was taken.