Opening Bell: 9.20.17

Guggenheim is in hot water; bitcoin's split could split again; quit your hedge fund and run for governor; a "Mad Pooper" is terrorizing Colorado; and more.
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Upheaval at the Top of Guggenheim, as SEC Scrutinizes Investment Powerhouse (WSJ)
Earlier this year, the U.S. Securities and Exchange Commission began looking at Guggenheim’s operations, certain investments and disclosures, according to people familiar with the situation. The regulator has since requested from Guggenheim information on several deals, including one involving the firm’s investment in an entity founded by former Barclays PLC chief executive Bob Diamond, the people said.

guggenheim

Bitcoin Is Likely to Split Again in November, Say Major Players (BBG)
Already, key players are warning investors to brace for more turmoil. Core developers including Peter Todd say the fork this time could be much more tumultuous, and could incur more user confusion of what version can be dubbed the actual “bitcoin.” “In a sense, a split is 100-percent guaranteed,” said Todd, a key coding contributor to bitcoin. “The split is likely to be more disruptive.”

Harvard Endowment Reports ‘Disappointing’ 8.1 Percent Return (NYT)
Perhaps out of an awareness that the returns this year were disappointing, Mr. Narvekar pointed out in his statement that he had run another “successful” endowment for 14 years. He was alluding to his tenure as head of Columbia University’s endowment. He wrote that he was convinced that at Harvard, a talented and successful team would overcome “legacy issues” as it shifted gears.

David Stemerman Shuts His Hedge Fund to Explore Run for Connecticut Governor (BBG)
“As Conatus approaches the end of its tenth year, I have decided to pursue an opportunity in public service and will be winding down the firm in December,” he wrote in a letter to investors. “As I begin to evaluate the opportunity to serve as Connecticut’s next governor, I expect to form a candidate committee that will prepare to launch a campaign in 2018.”

‘Buyback trade’ fizzles as stock repurchases slow (FT)
This year the S&P 500 Buyback index — which consists of 100 large US companies repurchasing the greatest proportion of their shares — has returned 9.6 per cent including dividends, while the broader stock market index has returned 13.3 per That is a reversal of relative fortune. Between the start of 2009 and the end of 2016, the buyback index gained 266 per cent, compared to the broader market’s 145 per cent gain.

Toys R Us buckled under private equity ownership (FT)
The blame is perhaps to be placed most squarely on its private equity ownership. Toys R Us has spent more than $250m a year servicing $5bn in long term debt, which was “not a sustainable situation,” one investor said, as the company faced increasingly crushing competition from Amazon and Walmart.

Buffett calls pessimists about United States 'out of their mind' (Reuters)
“When I hear talking about making it to 100, I get excited,” he said. “I‘m 87.” Buffett said he recently determined that of the 53,364 people in the United States who were at least 100 years old, the ratio of women to men was nearly 5-to-1. “We should start thinking about a sex change,” Buffett said, prompting laughter.

Wells Fargo's lone outsider aims to clean up bank's reputation (Reuters)
Since he took the job in March, Parker has been trying to improve Wells Fargo’s standing with regulators, answering questions from authorities and working through a raft of lawsuits over the bank’s improper sales practices. But Parker says his most challenging assignment is counseling top management as it seeks to replace a hard-charging sales culture with one focused on customer service. “I want to make the legal department of Wells Fargo a beacon for other departments in ethics,” Parker told Reuters.

America Wasn’t Built for Humans (NYMag)
The project of American democracy — to live beyond such tribal identities, to construct a society based on the individual, to see ourselves as citizens of a people’s republic, to place religion off-limits, and even in recent years to embrace a multiracial and post-religious society — was always an extremely precarious endeavor. It rested on an 18th-century hope that deep divides can be bridged by a culture of compromise, and that emotion can be defeated by reason. It failed once, spectacularly, in the most brutal civil war any Western democracy has experienced in modern times. And here we are, in an equally tribal era, with a deeply divisive president who is suddenly scrambling Washington’s political alignments, about to find out if we can prevent it from failing again.

Police Search For ‘Mad Pooper’ Who Dumps And Runs (CBS Denver)
Cathy Budde says her kids saw the woman mid-squat and came running back in the house to tell her. “They are like, ‘There’s a lady taking a poop!’ So I come outside, and I’m like … ‘are you serious?'” Budde said to the runner. “‘Are you really taking a poop right here in front of my kids?!’ She’s like, ‘Yeah, sorry!'” Budde says the runner is doing it in her neighborhood at least once a week for the last seven weeks, so they nicknamed her “The Mad Pooper.”

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