Opening Bell: 9.26.17 - Dealbreaker

Opening Bell: 9.26.17

Bitcoin is a bubble, says top crypto fund manager; congressional aides have a nice insider-trading sideline; good managers hold fewer stocks; why Yoda appears in Saudi history textbooks; and more.
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The Man Starting the World’s Biggest Crypto Fund Calls Bitcoin a Bubble (BB)
“This is going to be the largest bubble of our lifetimes,” Novogratz said. “Prices are going to get way ahead of where they should be. You can make a whole lot of money on the way up, and we plan on it.” RELATED: Shkreli's Wu-Tang Album Is the Newest Target in Odd Virtual Coin Craze

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Congressional aides risk conflicts with stock trades (Politico)
A POLITICO review of federal disclosures for 2015 and 2016 found that some senior aides regularly buy and sell individual stocks that present potential conflicts of interest with their work. A smaller number of staffers trade in companies that lobby Congress and the committees that employ them. In all, approximately 450 aides have bought or sold a stock of more than $1,001 in value since May 2015. That’s likely just the tip of the iceberg, since most congressional aides aren’t required to report their trades.

SEC hackers accessed authentic data used by companies in tests (Reuters)
Only after the SEC’s Enforcement Division detected a pattern of suspicious trading ahead of company public disclosures did officials go back to the agency’s technology staff and ask if some companies were using authentic data when they were testing the EDGAR system, one of the people said. The person said that “not many companies” had submitted real data that is believed to have been hacked.

How to Survive Wall Street's Robot Revolution (Businessweek)
Consider the junior investment banker, who spends much of his or her time collecting and analyzing data and then creating reports. Consulting firm Kognetics found that investment-banking analysts spend upwards of 16 hours in the office a day, and almost half of that is spent on tasks like modeling and updating charts for pitch books. Machine learning, and natural language processing techniques, are already very good at this.

UK and US report trade surplus with each other (FT)
At various times over the past decade, the UK and the US have both simultaneously recorded a trade surplus with each other. The discrepancy has become uncomfortable as the UK focuses on trade once it has left the EU and Donald Trump takes aim at the US’s trade deficits with other countries. Last year, for example, the UK claimed a £10bn goods trade surplus with the US, according to official statistics, while the US said it had recorded a surplus of $1bn.

No Mercy / No Malice: The Worm Has Turned (Scott Galloway)
Curing, rocketing, leaning in — no more. The worm has turned against big tech, and it’s overdue. The tipping point was the recent revelation that Mark Zuckerberg had unwittingly become Vladimir Putin’s bitch. However, each firm has its own links to the dark side and is about to face the same scrutiny and standards the rest of business endures. It’s. About. Fucking. Time.

Study: Skilled Managers “Should And Actually Do” Hold Fewer Stocks (II)
The more alpha that a manager produces, the fewer positions they hold. For every 10 basis points in monthly alpha that a manager earned above the average actively managed fund, that manager's portfolio held five fewer stocks. “It is ultimately the manager's selection skill – and not the composition of the portfolio per se – that generates subsequent investment performance.”

PHOTOS: Maria’s Trail of Destruction in Puerto Rico (BBG)
“There is no more agriculture in Puerto Rico,” José A. Rivera said. “And there won’t be any for a year or longer.”

'Gaydar' Shows How Creepy Algorithms Can Get (BBG)
Oppressive regimes don’t need algorithms to be oppressive. But we shouldn’t allow them to appeal to the authority of math and science in doing so. We should make them do their nasty things in full view. We should expose their political nature, because political fights at least might look winnable in the long run.

Saudi textbook features image of Yoda with King Faisal (BBC)
Saudi Arabia's education minister has apologised for the production of a school textbook in which the Star Wars character Yoda is seen superimposed on a photograph of the late King Faisal. Ahmed al-Issa said a committee was looking into the "unintended mistake". The image, which shows the diminutive Jedi Master sitting beside King Faisal as he signs the UN Charter in 1945, was created by the Saudi artist Shaweesh.

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Opening Bell: 11.30.17

Grandma wants bitcoin; hedge funds are betting on cheese; get ready for the end of the credit rally; even rats don't like to go to midtown, says science; and more.

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Opening Bell: 12.22.17

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Opening Bell: 03.08.12

Greece Readies Record Debt Swap With 60% Commitments (Bloomberg) Greece moved closer to sealing the biggest sovereign restructuring in history as investors indicated they’ll participate in the nation’s debt swap. Holders of about 60 percent of the Greek bonds eligible for the deal, including Greece’s largest banks, most of the country’s pension funds and more than 30 European banks and insurers including BNP Paribas (BNP) SA and Commerzbank AG (CBK), have agreed to the offer so far. That brings the total to about 124 billion euros ($163 billion), based on data compiled by Bloomberg from company reports and government statements. Roubini: Private Sector’s Greece Deal Is ‘Sweet’ (FT) “The reality is that private creditors got a very sweet deal, while most actual and future losses have been transferred to the official creditors." Hedge Funds See Tax Break in Republican Bill (Bloomberg) ^^^An interesting way of putting this: Cantor told House members in a memo last month his plan would let “every” business with fewer than 500 employees deduct 20 percent of its profits. Labor Dept. Asks Nuclear Guardians for Help Keeping Jobs Data Secret (CNBC) The Department of Labor has asked Sandia National Laboratories — the organization that ensures the safety of the nation’s nuclear weapons stockpile — to scrutinize the security procedures surrounding the release of monthly jobs report data. Separately, officials at the U.S. Energy Information Administration tell CNBC they have taken steps to block computers operating from certain Internet protocol addresses from accessing the administration’s website, arguing that some users appear to have a “malicious intent” to slow down the website’s release of data for the general public while speeding it up for themselves. U.S. Initial Jobless Claims Rose 8,000 to 362,000 (BW) Applications for unemployment insurance payments increased by 8,000 in the week ended March 3, Labor Department figures showed today. Economists forecast 352,000 claims, according to the median estimate in a Bloomberg News survey. The average over the past four weeks held close to a four-year low. Solar Storm Races Towards Earth (AP) The storm started with a massive solar flare earlier in the week and grew as it raced outward from the sun, expanding like a giant soap bubble, scientists said. When it strikes, the particles will be moving at four million miles an hour. "It's hitting us right in the nose," said Joe Kunches, a scientist for the National Oceanic and Atmospheric Administration in Boulder, Colo. The massive cloud of charged particles could disrupt utility grids, airline flights, satellite networks and GPS services, especially in northern areas. But the same blast could also paint colorful auroras farther from the poles than normal. 'Sterilized' Bond Buying an Option in Fed Arsenal (WSJ) Under the new approach, the Fed would print new money to buy long-term mortgage or Treasury bonds but effectively tie up that money by borrowing it back for short periods at low rates. The aim of such an approach would be to relieve anxieties that money printing could fuel inflation later, a fear widely expressed by critics of the Fed's previous efforts to aid the recovery. Treasury to Sell $6 Billion Worth of A.I.G. Shares (Dealbook) The Treasury Department announced a plan on Wednesday to sell $6 billion of its American International Group shares, further whittling down the federal government’s holdings in the insurance giant it helped bail out during the financial crisis. As part of the offering, which is expected to be completed in a few days, A.I.G. will buy back up to $3 billion worth of the common stock that the Treasury Department is selling. A.I.G. will also repay $8.5 billion in other obligations to the Treasury Department, principally using proceeds gained from various asset sales. The plan is the latest effort by the federal government to unwind its $182 billion bailout of A.I.G. in 2008. Last spring, the Treasury Department sold off 200 million shares of the insurer in a highly awaited offering known as the “re-I.P.O.” of A.I.G. Yet that sale still left the government owning about 77 percent of the company, down from 92 percent. ‘Madam’s my$tery man ID’d (NYP) Sources say David Walker, 47, an ultra-successful investment manager for Morgan Stanley, is the money man who met with soccer-mom-turned-Upper East Side-madam Anna Gristina right before her Feb. 22 arrest. And prosecutors say the business meeting in Morgan Stanley’s West 52nd Street offices that day was all about helping Gristina bring her high-end hooker business to the Web. It was minutes after the pair left the office building near Fifth Avenue that Gristina was arrested, the culmination of what prosecutors have described as a five-year investigation into the alleged call-girl ring. Prosecutors, without naming Walker, said at Gristina’s Feb. 23 arraignment, “We picked her up yesterday with a Morgan Stanley [broker] who she counts a close friend, and she had been present at his office for a meeting in which she was trying to solicit money to fund what we believe is another business venture on the Internet that involves matching up male clients with female prostitutes.” Gristina was arrested on East 53rd Street and Madison Avenue at 11 a.m., just a few blocks away from Walker’s home, a high-rise, doorman building on 55th near Third Avenue. Walker was not arrested, nor has he been charged with any crime. “She’s known him for a while. He was a nice guy. He was a banker trying to get her investors for her Web site,” said Vinnie Parco, a private eye working for Gristina.

FidelitySign

Opening Bell: 10.23.17

Fidelity managers aren't very nice; Saudi Arabia regrets Uber investment; Jordan Belfort thinks ICOs are a scam; the universe shouldn't exist; and more.

SorosTight

Opening Bell: 2.15.18

Markets ignoring stagflation; Soros is a crypto bro now; Steve Schwarzman is in a bubble of his own; Olympic dick statues are popular; and more!

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Opening Bell: 11.13.17

Bitcoin is doing the opposite of going up; Goldman bankers hit the hinterlands; Bill Miller wants you to know he's not senile; angry people smash Keurigs; and more.

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Opening Bell: 1.16.18

Cryptos in a nosedive; US government shutdown imminent; Ackman in court; car ends up in 2nd floor dentists office; and more!

Opening Bell: 02.04.13

UK Regulators Could Split Banks (WSJ) U.K. Treasury chief George Osborne on Monday will announce new powers for regulators to split up banks that flout rules designed to ring-fence retail banking from riskier investment-banking activity. In a wide-ranging speech on banking in Bournemouth, England, Mr. Osborne is expected to say the new powers are needed so that taxpayers will never again be on the hook when banks fail, as they were during the financial crisis. "We're not going to repeat the mistakes of the past. In America and elsewhere, banks found ways to undermine and get around the rules," Mr. Osborne will say, according to the extracts of his speech. "We could see that again—so we are going to arm ourselves in advance. In the jargon, we will "electrify the ring fence." New Details Suggest a Defense in SAC Case (NYT) In bringing its charges, the government said that SAC not only sold out of its position, but also bet against — or shorted — the drug companies' stocks before the public announcement of the bad news. The SAC short position, according to prosecutors, allowed it to earn big profits after shares of the companies, Elan and Wyeth, plummeted. "The fund didn't merely avoid losses, it greedily schemed to profit further by shorting Elan and Wyeth stock," said April Brooks, a senior F.B.I. official in New York, during a press conference on Nov. 20, the day Mr. Martoma was arrested. Internal SAC trading records, according to people directly involved in the case, indicate that the hedge fund did not have a negative bet in place in advance of the announcement of the drug trial's disappointing results. Instead, the records indicated that SAC, through a series of trades, including a complex transaction known as an equity swap, had virtually no exposure — neither long nor short — heading into the disclosure of the drug data. Blackstone To Become Investment Bank? (FT) Blackstone, one of the world's largest alternative asset managers, has quietly secured a securities underwriting licence as its expanding capital markets operation strays into investment banking territory. The licence marks the latest stage in the transformation of big listed private equity groups as they become more broadly based alternative asset managers. Apollo and KKR , two of Blackstone's biggest rivals, also have securities underwriting licences. The move highlights the pressure listed private equity groups are under to generate new sources of fee income to satisfy their public shareholders. "The private equity business is lousy for shareholders," says the head of capital markets for one buyout firm that is not listed. Obama: more tax revenue needed to address deficit (Reuters) President Barack Obama said on Sunday more tax revenue would be needed to reduce the U.S. deficit and signaled he would push hard to get rid of loopholes such as the "carried interest" tax break enjoyed by private equity and hedge fund managers. Herbalife Is The Subject Of 'Pending' Probe (NYP) The Los Angeles-based distributor of nutritional products is the subject of a law enforcement investigation, The Post has learned. The existence of the probe emerged after the Federal Trade Commission, responding to a Freedom of Information Law request by The Post, released 192 complaints filed against Herbalife over the past seven years. New Orleans Braces From Fallout From Blackout (AP) The outage, blamed on an unspecified "abnormality" in the Superdome's power system, was an embarrassment for New Orleans, which was hosting its first Super Bowl since 2002 and was eager to show off how it has been rebuilt since Hurricane Katrina. Mayor Mitch Landrieu called Sunday night's outage "an unfortunate moment in what has been an otherwise shining Super Bowl week for the city of New Orleans." He said he expected to receive "a full after-action report from all parties involved" in the coming days...For 34 minutes, the players tried to stay loose, the fans milled about in darkened corridors, and stadium officials scrambled to figure out what went wrong. The Ravens barely hung on for a 34-31 victory over the San Francisco 49ers, needing a goal-line stand in the closing minutes to preserve the championship. "It really hurt us," Baltimore fullback Vonta Leach said. "We had lot of momentum." There is sure to be some fallout for the city and the Superdome — especially since New Orleans plans to bid for the title game in 2018, in conjunction with the 300th anniversary of its founding. Escalators stopped working and credit-card machines shut down, though auxiliary power kept the playing field and concourses from going totally dark. "We sincerely apologize for the incident," Superdome spokesman Eric Eagan said. Most fans seemed to take the outage in stride, even starting up the wave to pass the time. "So we had to spend 30 minutes in the dark? That was just more time for fans to refill their drinks," said Amanda Black of Columbus, Miss. Question of Aiding Cyprus Places Germany in a Bind (NYT) In recent days, Germany has signaled that it is reluctantly edging toward a bailout for Cyprus, a haven for Russian cash, after lifelines have been extended to Greece, Ireland and Portugal to prevent potentially calamitous defaults. While Cyprus makes up just a sliver of the euro zone economy, it is proving to be a first-rate political headache. "I don't think that Germany has ever in the history of the euro zone crisis left itself so little wiggle room," said Nicholas Spiro, the managing director of Spiro Sovereign Strategy in London. "But Germany wants the euro to succeed and survive, and they are saying we can't afford a Cyprus bankruptcy." BlackRock Sued by Funds Over Securities Lending Fees (Bloomberg) BlackRock is accused in a lawsuit by two pension funds of reaping “grossly excessive” compensation from securities- lending returns associated with iShares Inc. “Defendants have systematically violated their fiduciary duties, setting up an excessive fee structure designed to loot securities lending returns properly due to iShares investors,” the funds, which invest in iShares, said in a complaint in federal court in Nashville, Tennessee. Two Top Barclays Executives Resign (WSJ) Barclays, whose chairman, chief executive and chief operating officer all resigned last summer in the wake of a series of controversies, said Sunday evening that finance chief Chris Lucas and Mark Harding, its general counsel, will both be retiring in coming months...Messrs. Lucas and Harding were longtime Barclays veterans who worked closely with former CEO Robert Diamond, who resigned last summer after the bank admitted that it had tried to rig benchmark interest rates and paid a roughly $450 million penalty. Youngest American Woman Billionaire Found With In-N-Out (Bloomberg) Lunchtime at the flagship In-N-Out Burger restaurant in Baldwin Park, California, is a study in efficiency. As the order line swells, smiling workers swoop in to operate empty cash registers. Another staffer cleans tables, asking customers if they’re enjoying their hamburger. Outside, a woman armed with a hand-held ordering machine speeds up the drive-through line. Such service has helped In-N-Out create a rabid fan base -- and make Lynsi Torres, the chain’s 30-year-old owner and president, one of the youngest female billionaires on Earth. New store openings often resemble product releases from Apple, with customers lined up hours in advance. City officials plead with the Irvine, California-based company to open restaurants in their municipalities. “They have done a fantastic job of building and maintaining a kind of cult following,” said Bob Goldin, executive vice president of Chicago-based food industry research firm Technomic Inc. “Someone would love to buy them.” That someone includes billionaire investor Warren Buffett, who told a group of visiting business students in 2005 that he’d like to own the chain, according to an account of the meeting on the UCLA Anderson School of Management website. Mint officially ends distribution of Canadian penny (CP) The phasing-out of the penny will lurch ahead today with the Royal Canadian Mint officially ending its distribution of one-cent coins to Canada's financial institutions. The move comes nearly a year after Finance Minister Jim Flaherty announced the demise of the penny, whose production cost came to exceed its monetary value. But as it faces extinction in the pockets and tills of most Canadians, the humble penny is still in demand in some artistic circles where it retains significant value. Renee Gruszecki, a Halifax-based academic and archivist, has spent the past year making a living through a jewelry business devoted primarily to preserving the country's stray cents. About 30,000 strategically sorted pennies fill Gruszecki's home and eventually find their way into the accessories produced at Coin Coin Designs and Co. Gruszecki, a long-time collector of lucky pennies, believes her pieces will help preserve a symbol that is both an object of superstition and a Canadian icon. "The maple leaf is synonymous with everything Canadian. We all identify with it," she said in a telephone interview. "Now it's just no longer going to be present among us, so I'm saddened by that." The Bank of Canada's Currency Museum has already taken steps to preserve the penny's place in Canadian culture. A mural consisting of nearly 16,000 one-cent pieces has been assembled at the museum to commemorate the coin's history, said assistant curator Raewyn Passmore. The mosaic, which depicts a giant penny measuring about two square metres, is comprised of coins ranging from the lustrous to the tarnished.