Opening Bell: 10.16.17

The stock market is crazy, if you haven't heard; Jim Grant performs ritual apology on live TV for Dalio; millennials mentor CEOs; woman trades her car for a packet of McDonald's sauce; and more.
Author:
Updated:
Original:

A ‘Crazy’ Stock Market Is Punishing Sellers (Businessweek)
At Credit Suisse Group AG’s prime brokerage desk in midtown Manhattan, the phone hardly seems to ring anymore. Its hedge fund clients don’t call about Donald Trump’s tweetstorms and the stock market or ask what to do when terrorists attack. And there was barely a whiff of panic when North Korea erupted in August. “Two rockets flew over the land mass of Japan and nothing happened,” says Mark Connors, Credit Suisse’s global head of risk advisory. “There were no calls. That’s absolutely crazy.”

Max_Beckmann,_1918-19,_The_Night_(Die_Nacht),_oil_on_canvas,_133_x_154_cm,_Kunstsammlung_Nordrhein-Westfalen,_Düsseldorf

The Mystery Of Wilbur Ross' Missing Billions (Forbes)
Between the November election and January inauguration, Ross had quietly moved a chunk of assets into trusts for his family members, leaving more than $2 billion off of his financial disclosure report—and therefore out of the public eye. Ross revealed the existence of those assets, and the timing of the transfer, when Forbes asked why his financial disclosure form listed fewer assets than he had previously told the magazine he owned. The hidden assets raise questions about whether the Secretary of Commerce violated federal rules and whether his family owns billions in holdings that could create the appearance of conflicts of interest.

The Crash of '87, From the Wall Street Players Who Lived It (BBG)
LEWIS: It makes everybody uncomfortable when something dramatic happens with prices, and no drama in the world could explain such movement. It makes the market seem absurd. And so that was the feeling. To me it was like, Corporate America is not worth whatever percent less today than yesterday.
MARKS: People think that if stocks went down 20 percent in a day, it must be the end of the world. That is, they impute intelligence to the market—and that’s a mistake.

Jim Grant says he was wrong to imply something suspicious was going on at Bridgewater (CNBC)
"We were wrong to question the relationship between the auditor and Bridgewater," Grant said. "Bridgewater is a secretive and eccentric firm and I let my suspicions of that get in the way of our ordinarily comprehensive due diligence." ... "Our failure to get the facts ... It pains me greatly," he added. "I ought to know better."

Everyone’s Fed Up With GE’s Accounting Tricks (BBG)
Last quarter, GE reported earnings of 28 cents a share. Also 13 cents a share, 19 cents a share and 15 cents a share -- all at the same time. The numbers represent profit that includes or excludes certain items, such as pension costs and discontinued operations. While most big U.S. companies release adjusted earnings that deviate from generally accepted accounting principles, GE stands out for the sheer head-scratching complexity of its quarterly reports. It’s one of only 21 S&P 500 companies that release more than one adjusted EPS figure.

Executive Mentors Wanted. Only Millennials Need Apply. (NYT)
Companies like Mastercard, Cisco Systems and Mars Inc. have experimented with these mentoring programs. Inga Beale, 54, the chief executive of the insurance marketplace Lloyd’s of London, has said that her junior mentor, who is 19, has a “totally different perspective” and leaves her “inspired.” Melanie Whelan, 40, the chief executive of SoulCycle, holds monthly meetings with her younger mentor, whom she has credited with helping her get ��hip with what the kids are doing these days.”

The Coming Renaissance of Macro Investing (Barron's)
Recent developments in technology and geopolitics, however, have already ignited a process to bring an end to the financial system predicated on petrodollars, which will have a profound impact on global financial markets. The 40-year equilibrium of this system is being dismantled by the exponential growth of technology, which will have a bearish impact on both supply and demand of petroleum. Moreover, the system no longer is in the best interest of key participants in the global oil trade. These developments have begun to exert influence on financial markets and will only grow over time. The upheaval of the petrodollar recycling system will trigger a resurgence of volatility and new price trends, which will lead to a renaissance in macro investing.

First Evidence That Online Dating Is Changing the Nature of Society (Technology Review)
Loose ties have traditionally played a key role in meeting partners. While most people were unlikely to date one of their best friends, they were highly likely to date a friend of a friend, for example. In the language of network theory, dating partners were embedded in each other’s networks. This has long been reflected in surveys of the way people meet their partners: through mutual friends, in bars, at work, in educational institutions, and so on. Online dating has changed that. Today, online dating is the second most common way for heterosexual couples to meet. For homosexual couples, it is far and away the most popular.

Peak Zuckerberg: There’s a new digital magazine coming that only analyzes photos of Mark Zuckerberg (Recode)
Hwang posted a call for entrees in July, and says he’s received between 60 and 70 submissions for the magazine, which will publish the best half dozen or so essays in early November. Some of the submissions focused on images you may have seen: young Zuckerberg sitting at a picnic table in front of a Stanford frat party; Zuckerberg strolling past the virtual reality army he’s helped create; Zuckerberg sweating profusely onstage at the D Conference in 2010.

Woman Trades Packet Of McDonald’s Szechuan Sauce For New Car (HuffPo)
The 23-year-old graphic designer is a huge fan of “Rick And Morty,” which featured the condiment as a key plot device in the Season 3 premiere, which aired in April. In the episode, series lead Rick Sanchez declares it his life mission to get the sauce, which was made in 1998 to promote the Disney animated feature “Mulan.” Since then, fans have craved the sauce ― including Marie. “When McDonald’s said they were bringing it back, I thought it would be cool to get a sauce,” she told HuffPost.

Related

Snap founders Evan Spiegel and Bobby Murphy

Opening Bell: 5.12.17

Millennial investors are ditching Snap; J. Peterman from Seinfeld is hawking a questionable IPO; the lengths we go for beer; and more.

Opening Bell: 03.08.13

Stress Tests Show Banks On The Mend (WSJ) The central bank said 17 of the 18 largest U.S. banks have enough capital to keep lending in a hypothetical sharp economic downturn, a sign the financial system is better prepared to weather a shock without resorting to a large, 2008-style infusion of government support. But the "stress test" figures released Thursday also showed that the Fed is paying special attention to the capital strength of companies with large trading operations, a group that includes Goldman Sachs, Morgan Stanley, and JP Morgan. That scrutiny could make it harder for those firms to win regulatory approval to increase dividends and buybacks, and could bruise the companies' recovering reputations with investors. Shares of Goldman and J.P. Morgan have been trading at their highest levels in a year, but both companies dropped more than 1% in after-hours trading following the Fed release. Citi Bests Stress Tests, Discloses Buyback Plan (CNBC) Where stress tests are concerned, call Citigroup "most improved." The bank posted an 8.3 percent tier 1 common capital ratio - the highest of its peers - under the Federal Reserve's annual stress tests. Unemployment Falls To 7.7% (WSJ) U.S. job growth jumped ahead in February, a sign of a steadily improving labor market and stronger economic gains. Employers added 236,000 jobs last month, the Labor Department said Friday. The unemployment rate, obtained by a separate survey of U.S. households, fell two-tenths of a percentage point to 7.7%, the lowest level since the end of 2008. Economists surveyed by Dow Jones Newswires had forecast that nonfarm payrolls would rise by 160,000 and the unemployment rate would fall to 7.8%. Chanos Has Ackman's Back On Herbalife Bet (NYP) Famed short seller Jim Chanos yesterday voiced his support for Ackman’s short position — and revealed he made money from shorting the Los Angeles-based company last year. “I think Bill Ackman is correct in his analysis” of Herbalife, Chanos said in a TV interview. “I’m not crazy for this multi-level-marketing business,” Chanos added...Chanos said on CNBC yesterday morning that he had shorted Herbalife last year, when it was around $50 — but got out when the price fell by half after Ackman went public with his short bet. Firms Send Record Cash Back To Investors (WSJ) Companies in the S&P 500 index are expected to pay at least $300 billion in dividends in 2013, according to S&P Dow Jones Indices, which would top last year's $282 billion. Goldman Symbol Gets More Elusive (WSJ) Upending a closely watched ritual in place since 1996, the New York securities firm told employees Thursday it now plans to promote a new crop of managing directors every two years, instead of each year. The change will start with the group selected later this year. The coveted title, which comes with a base salary of $500,000, elevates the chosen few at Goldman one step closer to the even higher rank of partner. In the memo, Goldman Chairman and Chief Executive Lloyd C. Blankfein and President and Chief Operating Officer Gary D. Cohn said the move would help the firm devote more time to the selection process. "A biennial process will allow us to invest more in the managing director selection process so that it will continue to be a disciplined and rigorous exercise," they wrote. "This will help to ensure that the managing director title remains as aspirational as it should be for our top performers." Hooters Is Chasing Women — as Customers (CNBC) The chain's waitresses are as buxom as ever but its sales have "flattened out," said Darren Tristano, executive vice president at research firm Technomic. Revenue peaked in 2007 at nearly $1 billion but had fallen to around $850 million last year, he estimated. (The privately-held company doesn't release sales figures.) The brand recently announced an overhaul aimed at making Hooters more mainstream than man-cave, adding more salads to its menu, remodeling stores and rolling out a series of ads last week to tout the changes. Icahn Bid Rattles Dell Plan (WSJ) Activist investor Carl Icahn said he would push to replace Dell's board and pursue "years of litigation" if the computer maker refused to accept his demand for a refinancing that would pay a hefty dividend to shareholders. Prodding the company to reject a $24.4 billion buyout offer that it agreed to last month and endorse his alternative, Mr. Icahn disclosed he owns a "substantial" stake in Dell and unleashed his trademark attack on directors and on the management-backed offer. "We see no reason that the future value of Dell should not accrue to all the existing Dell shareholders," Mr. Icahn wrote to a Dell special board committee, insisting it agree to his conditions or hold a vote for a replacement board that would. Ferrari $1.3 Million Hybrid Hits Resurgent Luxury Market (Bloomberg) At the Geneva Motor Show this week, Ferrari showed a 1 million-euro ($1.3 million)hybrid called LaFerrari. Bentley exhibited a revamped four-door Continental Flying Spur. Jaguar debuted the XFR-S, its fastest sedan ever. Rolls-Royce is adding a 245,000-euro coupe called the Wraith to its lineup. Companies Expand Offshore Cash Hoard By $183 Billion (Bloomberg) Microsoft, Apple, And Google each added to their non-U.S. holdings by more than 34 percent as they reaped the benefits of past maneuvers to earn and park profits in low- tax countries. Combined, those three companies alone plan to keep $134.5 billion outside the U.S. government’s reach, more than double the $59.3 billion they held two years earlier. Broker who managed money for NFL players bootled from securities industry after big loss (NYP) A Florida broker who managed money for dozens of prominent National Football League players — includingSantana Moss and Plaxico Burress — has been banned from the securities industry after putting the group into a high-risk investment that lost them a total of $40 million. Jeff Rubin, 38, directed some 31 NFL players into an illegal gambling operation in Alabama — which went bust two years later, a Wall Street regulator said yesterday. One of the players, Samari Toure Rolle, a former cornerback with the Baltimore Ravens, lost $3.2 million, the bulk of his liquid assets, to Rubin, according to the Financial Industry Regulatory Authority, which imposed the ban.

Coming soon to a Bridgewater office near you.

Opening Bell: 11.7.17

Ray Dalio's number-two is reportedly kinda handsy; Forbes says Wilbur Ross lied to them about being a billionaire for years; Dick Fuld is back, baby; Bjork wants to give you cryptocurrency; and more.

Opening Bell: 04.18.12

IMF Says Recovery Remains Fragile (WSJ) "An uneasy calm remains," IMF chief economist Olivier Blanchard said. "One has the feeling that any moment, things could well get very bad again." Worst Yet to Come as Crisis Rescue Cash Ebbs, Deutsche Bank Says (Bloomberg) The worst may be yet to come in the global financial crisis as the central bank spending that kept defaults low runs out, according to Deutsche Bank AG. Credit-default swap prices imply that four or more European nations may suffer so-called credit events such as having to restructure their debt, strategists led by Jim Reid and Nick Burns said in a note. The Markit iTraxx SovX Western Europe Index of contracts on 15 governments including Spain and Italy jumped 26 percent in the past month as the region’s crisis flared up. “If these implied defaults come vaguely close to being realised then the next five years of corporate and financial defaults could easily be worse than the last five relatively calm years,” the analysts in London said. “Much may eventually depend on how much money-printing can be tolerated as we are very close to being maxed out fiscally.” BNY Mellon Profit Falls as Record-Low Rates Cut Returns (Bloomberg) Net income fell to $619 million, or 52 cents a share, from $625 million or 50 cents, a year earlier, BNY Mellon said today in a statement. Analysts (BK) had expected the New York-based company to report a profit of 51 cents a share, according to the average of 15 estimates in a Bloomberg survey. Flat BlackRock Profit Tops Forecasts (WSJ) BlackRock reported a profit of $572 million, or $3.14 a share, compared with a year-earlier profit of $568 million, or $2.89 a share. Stripping out one-time items, per-share earnings rose to $3.16 from $2.96 a year ago. Revenue slipped 1.4% to $2.25 billion. Analysts expected earnings of $3.04 a share on $2.23 billion in revenue, according to a poll conducted by Thomson Reuters. Paulson Goes Short on German Bunds (FT) Paulson told investors in a call on Monday that he was betting against the creditworthiness of Germany, regarded in markets as among the safest sovereign borrowers, because he saw the problems affecting the euro zone deteriorating severely, said a person familiar with his strategy. Guy With Spreadsheet of Match.com ‘Prospects’ Says He Was Just Trying to Be Organized (Jezebel, earlier) "I work with spreadsheets a lot," he said. "It's a great additional tool. I work long days, go to the gym, go out on a couple of midweek dates or what not, get home late...how am I going to remember them? I'm not. So I made the spreadsheets. My comments aren't malicious or mean. This was an honest attempt to stay organized." He said he sent the spreadsheet to his date because "she works with spreadsheets a lot too" and she "seemed like a very sweet girl." Italy Puts Back Balanced Budget Goal by a Year (Reuters) Italy will delay by a year its plan to balance the budget in 2013 due to a weakening economic outlook, according to a draft document due to be approved by the cabinet of Prime Minister Mario Monti on Wednesday. The draft Economic and Financial document (DEF), which has been obtained by Reuters, raises the budget deficit forecasts for 2012-2014 and slashes this year's economic growth outlook. Bank of America Faces Bad Home-Equity Loans: Mortgages (Bloomberg) Bank of America, whose home- equity mortgage portfolio exceeds its stock market value, probably will say about $2 billion of junior loans are bad assets tomorrow even as some borrowers are still paying on time. That’s what Barclays Capital estimates the bank will report in its first-quarter results, following decisions by JPMorgan Chase, Wells Fargo and Citigroup to reclassify $4.1 billion of junior liens as nonperforming. In Facebook Deal For Instagram, Board Was Little Involved (WSJ) On the morning of Sunday, April 8, Facebook Inc.'s youthful chief executive, Mark Zuckerberg, alerted his board of directors that he intended to buy Instagram, the hot photo-sharing service. It was the first the board heard of what, later that day, would become Facebook's largest acquisition ever, according to several people familiar with the matter. Mr. Zuckerberg and his counterpart at Instagram, Kevin Systrom, had already been talking over the deal for three days, these people said. Negotiating mostly on his own, Mr. Zuckerberg had fielded Mr. Systrom's opening number, $2 billion, and whittled it down over several meetings at Mr. Zuckerberg's $7 million five-bedroom home in Palo Alto. Later that Sunday, the two 20-somethings would agree on a sale valued at $1 billion.

Opening Bell: 09.13.12

Ray Dalio: US Economy Out Of Intensive Care (Reuters) Hedge fund titan Ray Dalio said the U.S economy had come out of the "intensive care unit," but he warned against any quick move to "austerity" budget measures. "We were in the intensive care unit," Dalio, who runs the $120 billion hedge fund Bridgewater Associates, told more than 200 guests at the Council of Foreign Relations in New York on Wednesday. "We are largely healed and largely operating in a manner that is sustainable if we don't hit an air pocket." Dalio said a major challenge for U.S. politicians will be dealing with the so-called "fiscal cliff," the year-end expiration of the Bush-era tax cuts and previously agreed-upon cuts in defense spending and social programs, a combination which some economists say could lead to a recession. Dalio sided with economists who worry that a sharp reduction in government spending could lead the United States back into recession. "We can't just worry about too much debt," Dalio said. "We have to worry about too much austerity." German Court Clears Rescue Fund (WSJ) Germany's highest court cautiously approved the creation of the euro zone's permanent bailout facility, but insisted that the country keep its effective veto on all of the vehicle's decisions, a ruling that removes a question mark over two crucial elements of the euro zone's plans for mastering its debt crisis. Treasury Backs Plan For Standard Chartered Settlement (NYT) The lawyers approved a potential prepayment amount this week, a crucial step to a final agreement, though it will be much smaller than the $340 million the bank had to pay to New York State’s top banking regulator in a related case, according to three officials with direct knowledge of the settlement talks. The differing penalties stem from determinations by federal authorities and Manhattan prosecutors that the bank’s suspected wrongdoing was much less extensive than the state banking regulator’s claims that Standard Chartered had schemed with Iran to hide from regulators 60,000 transactions worth $250 billion over a decade. Insiders Get Post IPO Pass (WSJ) Wall Street underwriters increasingly are allowing corporate insiders to sidestep agreements that prevent them from quickly selling shares after initial public offerings. In the latest instance, several Wall Street banks on Wednesday allowed early investors and management of ExactTarget Inc. to sell more than seven million shares of the online marketing company a week ahead of the planned end of a "lockup" agreement. Under lockup pacts, underwriters bar company insiders from selling their shares, usually for 180 days after an IPO. The lockup restricts the supply of shares, helping buoy IPO prices; releasing more shares on the market can keep a lid on stock prices. Anna Gristina sits down with TV shrink Dr. Phil, says she won't talk to prosecutors about associate (NYDN) The Soccer Mom Madam's little black book has been whittled down to a single name. In her first major interview since being released from Rikers Island in June, Anna Gristina dishes to TV talk show shrink Dr. Phil about how prosecutors have hounded her for dirt on a just one associate. “They have an agenda to get me to talk about a certain person,” she told the daytime doc. Gristina refused to reveal the mystery man, or woman. Oprah's former head-shrink sidekick, who sat down at the kitchen table in Gristina's Monroe, N.Y. farmhouse, asked why the accused flesh-peddler didn't just save herself and give prosecutors the information they want. “I have a deep sense of loyalty and I'm Scottish." Gristina denied the criminal allegations during the teary interview, maintaining she was developing an online dating site where married men could meet single women. Whistleblower Key To Buyout Probe (WSJ) New York state Attorney General Eric Schneiderman's probe of tax practices at private-equity firms is based on information from a whistleblower, according to a person familiar with the matter. The information came from someone who approached Mr. Schneiderman's office between roughly nine months and a year ago, this person said. Under the state's False Claims Act, the attorney general can investigate alleged fraud against the state basedon a whistleblower's allegations. The ongoing probe is examining whether partners at private-equity firms changed management fees into investment income to delay tax payment and pay less—or avoid taxes altogether. Some private-equity firms use so-called management-fee conversions, while other firms avoid them. Wall Street Hopes for Romney, but Expects Obama to Win (CNBC) In an unscientific poll, 46 percent of respondents to the September CNBC Fed Survey said they expect President Obama to win reelection. Only 24 percent believe Republican Presidential Nominee Mitt Romney will get the job. Longtime Madoff Employee To Plead Guilty (Reuters) Irwin Lipkin, a former controller of Bernard L. Madoff Investment Securities LLC, will appear in Manhattan federal court on Th ursday, prosecutors said in a letter to the judge. He will plead guilty to charges of conspiracy to commit securities fraud and falsifying documents, prosecutors told U.S. District Judge Laura Taylor Swain in the letter. Suspect pulls gun on victim while having sex in a moving car (WNN) The incident began Sep. 2 when the victim and his two friends went to the Paddy Wagon Irish Pub in Port Charlotte. When the bar closed early Monday morning they invited two girls they met to one of the friend’s home on Atlas Street. One of the women and the victim went into a bedroom to have sex. The girl said she needed $250, which he said he didn’t have. She asked how much he had and he gave her $120. The victim then went to the bathroom and when he returned, found the two women had left the home. The victim had obtained the woman’s cell phone number earlier at the bar and called her; they agreed to meet at the Pick N Run store on Peachland Boulevard. When he got there he expected to meet the woman who took the $120. Instead, Linscott walked up to his Nissan Sentra and said the other girl ditched her. Linscott got into his car and as they drove off, he said she began touching him and having sex while he was driving. The victim told detectives she also said she needed money and he told her he already gave her friend $120 earlier. The victim said Linscott then put a .357 Taurus revolver to his head and demanded money. The victim grabbed the gun and a fight ensued in the moving car; he said he punched her in the head so she would release the gun. He told detectives he was in fear of his life and lost control of his car, struck a palm tree, went airborne and then ran across two front yards in the 1200 block of Dewhurst Street.