Opening Bell: 11.15.17

'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."

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.”