Opening Bell: 11.20.17

Can Barclays Afford to Compete Against U.S. Investment Banks? (WSJ)
Currently, the British retail unit is much more profitable than the investment bank. It made a return on equity of 18% in the last quarter, three times that of the corporate and investment bank. Yet some 60% of Barclays’s capital is locked up in the latter unit. The attention and capital being lavished on the investment bank have left some executives in the retail unit feeling sidelined, according to people familiar with the bank.

Blockchain Gets a Wall Street Win: 'We Know the Thing Works Now' (BBG)
The prospect of blockchain technology remaking financial services just moved a step closer to reality after banks including Goldman Sachs and JPMorgan Chase completed a successful six-month test in the $2.8 trillion equity swaps market. The program, managed by blockchain startup Axoni, kept track of the swaps contracts after they were executed, recording things like amendments or termination of the deals, stock splits and dividends, and achieved a “100 percent success rate,” Axoni said in a statement. RELATED: These Doomsday Preppers Are Starting To Switch From Gold to Bitcoin

A Hedge Fund Manager Committed Fraud. Would the U.S. Let Him Go? (NYT)
Before Mr. Baker left Chicago to begin serving his sentence, he received a bill from the Justice Department for $154,831,682.32 in restitution. “We strongly urge you to pay this debt immediately,” the bill said. He also received divorce papers from his wife.

Debt restructuring battle is brewing over Venezuela (FT)
People in the industry say one person is emerging as a potentially crucial player in the messy situation: a mysterious, art-loving Mexican billionaire called David Martinez. Mr Martinez runs a hedge fund called Fintech Advisory, and has been involved in almost every sovereign debt restructuring in the past quarter century, according to a rare comment piece he wrote for the Financial Times in 2013.

Venezuela: So You Want To Default on Your Sovereign Debt? (Buy The Dip)
1. Make sure you can cope day-to-day cut off from global debt markets. There are two ways around this one: Either make sure you have more revenue than expenditure on the fiscal side; or a current account surplus even after netting capital flight out of the capital account. Venezuela Grade: F-. The only crumb of comfort is that Venezuela hasn’t had a functioning domestic debt market in a decade.

There Is No Inflation Puzzle (PIIE)
Based on the Phillips curve, we would expect inflation to rise by about half a percentage point over the next year. But historical experience suggests that inflation may end up anywhere from 1 percentage point lower to 3 percentage points higher. In other words, the Phillips curve remains an important fundamental driver of inflation, but we should not overstate the precision with which it operates.

Delivering Negative Alpha (Pension Partners)
Back in the day, long/short equity funds (the largest hedge fund strategy by assets) actually used to hedge. They used to take risk. They used to look quite different than the overall stock market. And they used to deliver alpha. How do they look today? In aggregate, like a lower beta version of an index fund. With a correlation of 0.87 to the S&P 500 over the past few years, they pretty much move in lockstep with the market.

Suspect dances for Texas officers before police dog ends jig (AP)
A man who led police on a nearly 20-mile chase through Houston was taken into custody only after dancing for a time once he stepped out of his car. The unidentified suspect came to a stop early Thursday before striking spike strips police had laid across Interstate 45. He eventually complied with police orders to step out of his car but rather than lay on the ground, the man began a dance with arms above his head. The episode concluded when a police dog attacked him.