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Opening Bell: 11.15.17

Cryptos are riddled with pump-and-dump scammers; Zimbabwe is having a coup; Credit Suisse feel bad for millennials; Cards Against Humanity bought a section of U.S.-Mexico border as a marketing gimmick; and more.
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'Market manipulation 101': 'Wolf of Wall Street'-style 'pump and dump' scams plague cryptocurrency markets (BI)
One group, PumpKing Community, contained links to "Instructions for pump on Bittrex" as well as links to Facebook groups and Telegram channels where pumpers could go to attract new investors to the market. Channels like these attract participants to the scam with promises of wealth and quick profits. The PumpKing guide said: "Our PUMP will consist of 4 main stages, and we strongly recommend that you divide your deposit into 3 parts in order to get the maximum profit."

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Millionaire Bankers Feel Sorry for Struggling Millennials (BBG)
“They faced the rigors of the financial crisis... and have also been widely hammered by high and rising house prices, rising student debt and increasing inequality. Millennials are not only likely to experience greater challenges in building their wealth over time, but also greater wealth inequality than previous generations.”

Zimbabwe’s Military, in Apparent Takeover, Says It Has Custody of Mugabe (NYT)
Zimbabwe’s military said early Wednesday that it had taken custody of President Robert Mugabe, the world’s oldest head of state and one of Africa’s longest-serving leaders, in what increasingly appeared to be a military takeover. After apparently seizing the state broadcaster, ZBC, two uniformed officers said in a short predawn announcement that “the situation in our country has moved to another level.” While denying that the military had seized power, they said that Mr. Mugabe and his family “are safe and sound, and their security is guaranteed.”

Wells Fargo illegally repossessed another 450 service members' cars (CNNMoney)
Wells Fargo has uncovered another 450 service members who had their vehicles illegally repossessed by the bank. That brings the total to more than 860.

Stock Market Valuation and the Macroeconomy (FRBSF)
Over the long history of the stock market, extreme run-ups in the CAPE ratio have signaled that stocks may be overvalued. A simple regression model that employs a parsimonious set of macroeconomic explanatory variables can account for most of the run-up in the CAPE ratio since 2009, offering some justification for its current elevated level. The same model predicts a 13% decline in the CAPE ratio over the next 10 years. This prediction, if realized, would imply lower returns on stocks relative to those enjoyed in recent years when the CAPE ratio was rising.

Passive investing is a 'chaotic system' that could be dangerous, warns Robert Shiller (CNBC)
"The problem is that if you are talking about passive indexing, that is something that is really free-riding on other people's work," Shiller said. "So people say, 'I'm not going to try to beat the market. The market is all-knowing.' But how in the world can the market be all-knowing, if nobody is trying — well, not as many people — are trying to beat it?"

Is Robert Shiller Right That Passive Investing is Dangerous? (Prag Cap)
Shiller is creating a non-sequitur when he ponders the idea that “everyone might index”. That is literally impossible. Second, Shiller does not seem to appreciate the fact that a less active investor (what he calls “passive”) needs more active investors to have a functioning index.

Ray Dalio Has an Unbelievable Algorithm (BBG View)
I witnessed firsthand Dalio's confidence in his approach last March, when I was in New York practicing a TED talk. My message was that we should stop putting so much faith in allegedly objective algorithms. Dalio, who was in the audience, suggested that I’d gotten it all wrong -- that algorithms are good when they reflect the minds of their creators, and bad when they don’t.

Cards Against Humanity Is Trying To Stop Trump’s Wall By Purchasing Border Land (HuffPo)
“Donald Trump is a preposterous golem who is afraid of Mexicans. He is so afraid that he wants to build a twenty-billion dollar wall that everyone knows will accomplish nothing. So we’ve purchased a plot of vacant land on the border and retained a law firm specializing in eminent domain to make it as time-consuming and expensive as possible for the wall to get built. On Day 1, all Cards Against Humanity Saves America recipients will get an illustrated map of the land, a certificate of our promise to fight the wall, some new cards, and a few other surprises.”

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By Nordenfan (Own work) [CC BY-SA 4.0], via Wikimedia Commons

Opening Bell: 7.7.17

Some employees don't want Deutsche Bank to be so Deutsche; Paul Singer hasn't forgotten about Akzo; millennials are ruining sex; and more.

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Opening Bell: 7.13.17

Meet Lloyd Blankfein version 3.0; people actually want to be CEO of Uber; high-speed traders are making no money at a record clip; Cards Against Humanity *For Her*; and more.

Opening Bell: 04.18.13

Morgan Stanley Sees Core Earnings Weaken (WSJ) Morgan Stanley saw core earnings weaken, although the investment bank swung to a first-quarter profit as it benefited from a comparison with a year-earlier period bogged down by a heavy charge. For the quarter, the bank reported a profit of $984 million, compared with a year-earlier loss of $94 million. The per-share profit, which reflects the payment of preferred dividends, was 49 cents compared with a loss of six cents a year earlier. The latest period featured a decline in fixed-income trading revenue, but strong stock trading and continued improvements in Morgan Stanley's wealth-management division, which was buoyed by strong markets. ... Revenue jumped 18% to $8.16 billion. Excluding debt valuation, revenue was $8.48 billion. Analysts polled by Thomson Reuters most recently expected earnings, excluding debt-valuation adjustments, of 57 cents, on revenue of $8.35 billion. Blackstone First-Quarter Profit Rises on Fund Performance (Bloomberg) Blackstone Group LP (BX), the world’s biggest buyout firm, said first-quarter profit rose 28 percent as market gains lifted the carrying value of its holdings. Economic net income, a measure of earnings excluding some costs tied to the firm’s 2007 initial public offering, increased to $628.3 million, or 55 cents a share, from $491.2 million, or 44 cents, a year earlier, New York-based Blackstone said today in a statement. Analysts had expected earnings of 53 cents a share, according to the average of 15 estimates in a Bloomberg survey. Barclays Head of Investment Banking Rich Ricci to Retire in June (Bloomberg) Barclays Plc’s Rich Ricci, the head of investment banking and one of the last members of former Chief Executive Officer Robert Diamond’s management team, will retire at the end of June. Ricci, 49, will be replaced by Eric Bommensath and Tom King, 52, as co-chief executive officers of corporate and investment banking in May, the London-based bank said in a statement today. “The market will see this as an inevitable and appropriate piece of transitioning,” said Ian Gordon, an analyst at Investec Plc (INVP) in London. “Few tears will be shed and the reshuffle will be broadly welcomed.” Special Report: The battle for the Swiss soul (Reuters) A sign on display in UBS's museum, from a bank founded in 1747 in the Italian-speaking part of Switzerland, could almost be Switzerland's mantra: "MASSIMA DISCREZIONE" it promises. Swiss bankers have long adhered to an unwritten code similar to that observed by doctors or priests. Bankers do not acknowledge clients in public for fear of exposing them as account holders; they often carry business cards with just a name, rather than bank or contact details; and, at least until the 1990s, they never advertised abroad. ... Even today, few Swiss like to discuss the fact that much of the country's prosperity was built on bankers helping foreigners evade taxes. Visitors should avoid personal questions, advises Communicaid, a consultancy which advises businesses on cross-cultural awareness. It would also be wise to steer clear of discussing "Swiss banks, money or Switzerland's military role in World War One or Two." Reinhart/Rogoff and Growth in a Time Before Debt (RortyBomb via Felix Salmon) Here is a simple question: does a high debt-to-GDP ratio better predict future growth rates, or past ones? If the former is true, it would be consistent with the argument that higher debt levels cause growth to fall. On the other hand, if higher debt "predicts" past growth, that is a signature of reverse causality. ... As is evident, current period debt-to-GDP is a pretty poor predictor of future GDP growth at debt-to-GDP ratios of 30 or greater—the range where one might expect to find a tipping point dynamic. But it does a great job predicting past growth. Ottawa sets up taxpayer-funded food truck in Mexico to promote Canadian cuisine (National Post) When author Anita Stewart first heard about the Canadian government’s new food truck parked in Mexico City, she laughed so hard she cried. The new Canada-branded, taxpayer-funded venture, which kicked off its three-week pilot project last week, is serving up a Mexican-ized version of poutine, using Oaxaca cheese instead of curds. Also on the menu are Alberta beef tourtière, and maple-glazed Albacore tuna. China Vows Wider Yuan Movement (WSJ) China's central bank plans to widen the yuan's trading band in the near future, People's Bank of China Vice Governor Yi Gang said Wednesday, suggesting that China's leaders will press ahead with change despite the surprise slowing of the economy. "The exchange rate is going to be more market-oriented," Mr. Yi said on a panel at the International Monetary Fund spring meetings in Washington. "I think in the near future we are going to increase the floating band even further." IMF warns on risks of excessive easing (FT) Extraordinarily loose monetary policy risks sparking credit bubbles that threaten to tip the world back into financial crisis, the International Monetary Fund warned on Wednesday. In its global financial stability report, the fund cautioned that policy reforms were needed urgently to restore long-term health to the financial system before the long-term dangers of monetary stimulus materialised. German Parliament Approves Bailout for Cyprus (WSJ) German Finance Minister Wolfgang Schäuble called the vote a "strong signal" by Germany in favor of the euro and the euro zone. The parliament also voted in favor of a seven-year extension of the maturity on European Financial Stability Facility loans for Ireland and Portugal with a large majority. SEC to Move Past Financial Crisis Cases Under New Chairman White (Bloomberg) Mary Jo White, the first former prosecutor to serve as chairman of the U.S. Securities and Exchange Commission, has pledged to run a “bold and unrelenting” enforcement program at the agency charged with regulating Wall Street. With financial crisis cases mostly done and some of the biggest insider-trading cases in history closed, White will have to chart a course into new areas to keep that pledge. White, who was sworn in last week, has already provided a few signals about what that might be. During her Senate confirmation hearing, she said she intends to focus on high- frequency and automated trading. She has also raised questions about a drop in the number of accounting fraud cases the agency has brought in recent years. Dispute in Hamptons Set Off by Effort to Hold Back Ocean (NYT) Soon after Hurricane Sandy hit last fall, Joshua Harris, a billionaire hedge fund founder and an owner of the Philadelphia 76ers, began to fear that his $25 million home on the water in Southampton might fall victim to the next major storm. So he installed a costly defense against incoming waves: a shield of large metal plates on the beach, camouflaged by sand. His neighbor, Mark Rachesky, another billionaire hedge fund founder, put up similar fortifications between his home and the surf. Chris Shumway, who closed his $8 billion hedge fund two years ago, trucked in boulders the size of Volkswagens. Across a section of this wealthy town, some residents, accustomed to having their way in the business world, are now trying to hold back the ocean. ‘Elvis’ is busted in ricin terror (NYP) The FBI last night busted a troubled Mississippi Elvis impersonator as the poison-wielding man who mailed ricin-laced letters to President Obama and two other officials. ... Despite his rock ’n’ roll hobby, Curtis shows his angry side on Facebook, where he lashes out in a conspiracy-filled rant. “I’m on the hidden front lines of a secret war,” he wrote. “They burned down my home, killed my dogs, my cat, my rabbit, blew up my 1966 Plymouth Valiant . . . and guess what? I am still a thorn in their corrupt anals! I will remain here until Jesus Christ decides it’s time for me to go.”

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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.

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Opening Bell: 6.21.17

Travis Kalanick hitting the dusty trail; brokers are stealing investors' best ideas; Trump gets poorer; Canadian bar owner incensed at theft of human toe; and more.

Not the victim in question By Niels de Wit from Lunteren, The Netherlands (1981 MOWAG B 300) [CC BY 2.0], via Wikimedia Commons

Opening Bell: 8.19.16

Credit Suisse CEO vs Credit Suisse bankers; Washington insider is subject of trading probe; Police say Ohio man tried to have sex with a red van; and more.

By Alex Guibord [CC BY 2.0], via Wikimedia Commons

Opening Bell: 10.1.18

NAFTA lives!; John Flannery does not!; Elon does both!; Breast pump ad goes awry; and more!

Getty Images

Opening Bell: 12.19.16

Apple gears up for Europe tax war; Barclays dumps another 7,000 clients; meat pies in space; and more.