Opening Bell: 9.11.17

Goldman wants to conquer U.K. retail; China is done tolerating bitcoin; Jamie Dimon's fondness for D.C. grows; don't shoot guns at the hurricane; and more.
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By kloniwotski (Flickr) [CC BY-SA 2.0], via Wikimedia Commons

By kloniwotski (Flickr) [CC BY-SA 2.0], via Wikimedia Commons

Goldman Sachs to take on UK retail banks (FT)
A Britain-based financial services banker at a rival to Goldman said it was easier to organically grow a deposit book by offering a rate near the top of the savings product tables than by acquiring one. The banker added that UK retail lenders could now view Goldman as a rival and be deterred from using its investment banking services.

Donald Trump Is Irrelevant to Corporate America (New Yorker)
“The business community has been very aligned privately with leaders on the Republican caucus, both House and Senate,” a Wall Street executive who backed Hillary Clinton but supports certain parts of Trump’s agenda told me. “Everybody believes reform will happen or not happen irrespective of Donald Trump. That’s the big change. I believe we will have tax modification. I believe Trump will have nothing to do with it. It doesn’t matter whether he does or doesn’t. What I’m saying is Donald Trump as a leader of an agenda and a set of policies is no longer a part of the frame.”

Employees of Fintech Firm SoFi Allege Women Are Treated Improperly (WSJ)
Employees describe a culture inside its headquarters in the Presidio neighborhood in San Francisco and a call center in nearby Healdsburg, Calif., where they felt pressure to work extra hours at night and on holidays to avoid being fired. Mr. Cagney, 46 years old, used to tell SoFi staff that if they weren’t waking up twice a week in a cold sweat, they weren’t working hard enough, according to a former staffer. Some of those employees said that the culture veered out of control at times, with executives breaking furniture and throwing telephones out of anger.

China to Shut Bitcoin Exchanges (WSJ)
The country’s central bank has led a draft of instructions that would ban Chinese platforms from providing virtual currency trading services, according to people familiar with the matter. The move comes after months of scrutiny by Beijing, including a ban last week in China on initial coin offerings, a kind of fundraising via virtual currencies....“Too much disorder was naturally a basic reason” for the ban, said one of the people. SEE ALSO: Bears target ways to bet on cryptocurrency mania imploding

Tesla’s Damaged Goods Problem (Marginal Revolution)
I fear that Tesla may have made a marketing faux-pas. When it turns off the extra mileage boost are Tesla customers going to say “thanks for temporarily making my car better!” Or are they going to complain, “why are you making MY car worse than it has to be?”

Jamie Dimon ventures beyond Wall Street to have a say in Washington (Reuters)
The frequency of his trips, and the wide range of policies he has been discussing, have started chatter among power brokers in Washington and on Wall Street about how much energy Dimon is devoting to issues beyond JPMorgan. At times, they said, Dimon carries himself more like someone running the country than someone running a bank.

Clinton Says Giving Paid Speeches to Wall Street Firms a Mistake (BBG)
“Just because many former government officials have been paid large fees to give speeches, I shouldn’t have assumed it would be okay for me to do it,” Clinton wrote. “Especially after the financial crisis of 2008-2009, I should have realized it would be bad ‘optics’ and stayed away from anything having to do with Wall Street. I didn’t. That’s on me.”

9/11 responders who became ill from toxic exposure now have a monument to their heroism (LATimes)
Researchers estimate that the choking dust that coated the ground zero recovery site — and persisted in the air for days afterward — contained a hazardous mix of airborne particles, including aluminum, asbestos, glass and the remnants of burned jet fuel. On Monday, a memorial on Long Island will be dedicated to both the nearly 3,000 people who lost their lives on Sept. 11, and those who died of illnesses stemming from the attacks and their aftermath.

Florida Police Warn People Not to Shoot Their Guns at Hurricane Irma (Time)
"To clarify, DO NOT shoot weapons at Irma," the Twitter account of the Pasco County Sheriff's office tweeted on Saturday night, just hours before the eye of the storm passed over the Florida Keys. "You won't make it turn around & it will have very dangerous side effects." Bullets fired into a storm system like a hurricane can have unpredictable and potentially dangerous trajectories.

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Dimon To Fault Controls On Risk (WSJ) Mr. Dimon, scheduled to appear before the Senate Banking Committee on Wednesday morning, intends to apologize for the miscues—a stark departure from his normal shoot-from-the-hip demeanor. But Mr. Dimon will push back on any implication that the incident is lastingly detrimental to the largest U.S. bank by assets. In fact, the New York company expects its second quarter to be "solidly profitable" despite the losses, Mr. Dimon said in an early copy of his prepared remarks. "We will not make light of these losses, but they should be put into perspective," Mr. Dimon is expected to say. "We will lose some of our shareholders' money—and for that, we feel terrible—but no client, customer or taxpayer money was impacted by this incident." Jamie Dimon's Testimony (PDF) "All of these activities come with risk. And just as we have remained focused on serving our clients, we have also remained focused on managing the risks of our business, particularly given today’s considerable global economic and financial volatility. Last, I would like to say that in the face of these recent losses, we have come together as a Firm, acknowledged our mistakes, and committed ourselves to fixing them. We will learn from this incident and my conviction is that we will emerge from this moment a stronger, smarter, better company." Dimon: JPMorgan Traders Took Risks They Didn't Understand (Bloomberg) In testimony prepared for a hearing today, Dimon expressed regret over losses in the bank’s chief investment office, saying that its trading strategy was “poorly conceived and vetted” by senior managers who were “in transition” and not paying adequate attention. Greeks Withdraw $1 Billion A Day Ahead Of Vote (Reuters) Greeks pulled their cash out of the banks and stocked up with food ahead of a cliffhanger election on Sunday that many fear will result in the country being forced out of the euro. Bankers said up to 800 million euros ($1 billion) were leaving major banks daily and retailers said some of the money was being used to buy pasta and canned goods, as fears of returning to the drachma were fanned by rumors that a radical leftist leader may win the election. At Starbucks, Uncertainty Over Mayor's Drink Plan (NYT) As the Bloomberg administration moved ahead on Tuesday with its plan to restrict sales of big sugary drinks in New York, securing a preliminary nod from the city’s Board of Health, it said it is still trying to determine the impact on one popular beverage brand: Starbucks. Mayor Michael R. Bloomberg’s plan, which would limit the size of sweet drinks sold at many establishments to 16 ounces or less, exempts any beverage that contains more than 50 percent milk by volume. Officials in City Hall and in Seattle said they were unsure how those rules might affect the Starbucks family of syrupy, milkshake-style coffee drinks, catnip to thousands of caffeine-addicted New Yorkers who frequent the company’s 190 outlets in Manhattan...The rules would ban large sodas sold at fast-food restaurants, movie theaters and street carts. But the Big Gulp, the supersized soda cup at 7-Eleven, would still be allowed under the proposal, because the proposal would exempt the sale of drinks in groceries or convenience stores. Full-Scale Bailouts for Italy, Spain in 6 Months: Egan-Jones (CNBC) Spain and Italy need a full-scale bailout from the European Union because of their high levels of government debt and the credit quality of their banks, and will likely seek help within the next 6 months, according to Sean Egan, Founding Partner and President of Egan-Jones, an independent ratings agency. Poor credit quality of banks usually goes hand-in-hand with poor government finances as the two institutions are “joined at the hip”, Egan told CNBC Asia’s “Squawk Box” on Wednesday. That’s the case for most countries such as the U.S., the U.K., Switzerland and Ireland; Spain and Italy are no exceptions, he said. “It makes little sense to separate the banks’ credit quality from the governments’ credit quality because quite often, they support each other and that’s certainly the case in Italy and Spain,” he said. “We think that Spain will be back at the table, asking for more than the 100 billion euros ($125 billion) that they just asked for, and we think that Italy will also come to the table within the next 6 months.” Chinese Banks To See Squeeze On Profit (WSJ) In a bid to bring down lending rates and rev up economic growth, China's central bank said last week it would allow banks to double the maximum discount on loans and offer deposit rates that can reach 1.1 times the benchmark level. That could squeeze the minimum spread between loans and deposits from 2.4% to as little as 1.5%. "It's the biggest step towards a market-oriented interest-rate regime since 2004," said Yin Jianfeng, a researcher at government think tank the Chinese Academy of Social Sciences, referring to a past easing of controls on lending rates. "Given the global financial tumult and domestic economic slowdown, I'd say it's a really bold move." ING Fined A Record Amount (WSJ) ING Bank has agreed to pay a record penalty of $619 million for illegally moving billions of dollars through the U.S. banking system on behalf of Cuban and Iranian clients and threatening to fire employees if they failed to conceal the origin of the money. The U.S. prohibits certain countries and entities from accessing the U.S. banking system through sanctions enforced by the Treasury Department's Office of Foreign Assets Control. Banks in Manhattan, which process most of the world's U.S. dollar payments, use "filters" to prevent terrorists, money launderers and other criminals from gaining access. Let's Pizza vending machine ready for U.S. debut (PM) Let's Pizza, a vending machine that creates pizzas from scratch in 2.5 minutes, is about to plant a flag in U.S. soil. The machine was created by Italian Claudio Torghel and is distributed by A1 Concepts, based out of The Netherlands...The machine contains a specially developed bag of flour and a bag of mineral water. Every time you order a pizza, the machine will start making the dough, then shape it into a crust, and top it with organic tomato sauce. Next, one of the toppings is placed on top and the pizza is ready for the oven. Each machine offers four different kinds of pizzas.

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Banks Worry As Breakup Talk Revived After JPMorgan Loss (Bloomberg) “There seems to be growing interest in some type of breakup proposal,” said Sheila Bair, a former chairman of the Federal Deposit Insurance Corp. The concept is expected to arise today as JPMorgan Chief Executive Officer Jamie Dimon testifies before the House Financial Services Committee on the trading debacle. Last week he told the Senate that the losses, which carved about $23 billion from the bank’s market value, were due to a poor investing strategy coupled with management failures. 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"It was gambling money, to be honest with you," he said on Monday. "Any time you try to time the market, you get what you deserve. Sometimes you're right. Sometimes you're wrong. This time I was wrong." Goldman: Fed Will Ease Monetary Policy This Week (CNBC) The Federal Open Market Committee will likely say it would buy assets such as mortgage-backed securities and U.S. Treasurys when it meets for a two-day meeting starting Tuesday, Jan Hatzius, the investment bank’s Chief U.S. Economist said in a report on Monday. “We would be quite surprised if we saw no easing this week,” Hatzius wrote in the report. The End Of The Line For Famed Exchange (WSJ) The owner of the Bendigo Stock Exchange, which traces its roots to a time when thousands of prospectors descended on Victoria state after gold was discovered by two women washing clothes in a creek, plans to close the institution at the end of June. Mike Tyson Set For Broadway Debut (NYDN) The last time Mike Tyson was on stage at a Broadway theater, it was four years ago and he nearly wrecked what was left of his boxing career by biting Lennox Lewis on the leg during a press conference at the Hudson Theater. Now Tyson is returning to a Broadway theater to breathe life into his new career - theatrical performer. Tyson was on stage at the Longacre Theater in midtown on Monday afternoon to announce his one-man show, which will begin a limited engagement on July 31. The show, entitled "Mike Tyson-Undisputed Truth'' will be directed by Spike Lee, who also will be making his Broadway debut. "Mike has lifted himself off the canvas,” Lee said. "It's a great story and Mike tells it masterfully.”

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