Opening Bell: 11.3.17

Tesla still trying to figure out how to put cars together; Venezuela is restructuring some of its debt; Twitter employee mercifully rids Twitter of Donald Trump (for 11 minutes); and much more.

Author:
Dealbreaker
Updated:
Jan 14, 2019
Original:
Nov 3, 2017

Tesla hits bumps in pursuit of mass market (FT)
In multiple instances, the company shipped cars from the factory that lacked key parts such as computer modules, digital displays, or even seats. These parts were flown to Tesla-owned dealers, who then assembled them into the vehicle before completing the shipments to customers, according to several people familiar with the practice. “This goes back years,” says a former regional executive, who declined to be named. “It was common, common in every market — the seats, the displays were being flown in.”

Venezuela Will Seek to Restructure Its Debt (BBG)
Maduro made the announcement in a televised address in which he emphasized that Venezuela has always honored its obligations, and had the money to continue doing so, but was being hampered by the financial penalties the U.S. imposed. Throughout the broadcast, Maduro kept Wall Street viewers on the edge of their seats by teasing an upcoming “historic announcement on debt,” then spending a half hour touting new ambulances and public roads as he waited for the international media to tune in.

Goldman Retreats From Options as Stock Derivatives Trading Struggles (WSJ)
An extraordinary calm in markets has choked the trades that typically funnel through banks’ derivatives desks. Banks like Deutsche Bank, Barclays and J.P. Morgan blamed lower revenues on depressed volatility when recently reporting earnings. Goldman Sachs pulled back from U.S. options market-making on exchanges, a spokeswoman for the firm said Thursday. It’s the latest to withdraw from the business of continuously buying and selling contracts on venues using automated programs.

Joe Ricketts Shuts Down DNAinfo and Gothamist After Vote to Unionize (NYT)
For DNAinfo and Gothamist, the staff’s vote to join the Writers Guild of America East was just part of the decision to close the company. A spokeswoman for DNAinfo said in a statement, “The decision by the editorial team to unionize is simply another competitive obstacle making it harder for the business to be financially successful.”

Under Powell, Wall Street Can Expect Steady Wins on Regulation (BBG)
“For Wall Street, Powell is a solid choice,” said Ian Katz, an analyst with Capital Alpha Partners in Washington. “He supports deregulation but not to an extreme. He’s a known quantity and he’s regarded as a thoughtful consensus-seeker. The finance industry views him as safer choice than someone who would want to blow up the place and scrap all the Dodd-Frank rules.”

Yellen Retrospective (John Cochrane)
One could complain that Ms. Yellen didn't face any particular challenges. As presidents are tested in wartime, so Fed chairs are tested by events. Ms. Yellen didn't face a recession or financial crisis. In this quiet late summer of the business cycle, her job was largely to do nothing, and resist calls from people who wanted her to take big steps. The Fed's major tool is the federal funds rate, has barely moved. True, but she did not screw up either. So much of monetary history consists of unforced errors, that not making one is an accomplishment.

Powell Is Trump's Kind of Rich (BBG Gadfly)
Powell's investment in the fund is listed on the form as "over $1 million," and so most reports have valued the holding at the seven-figure mark. But Powell's disclosure also says he received as much as $1 million in income from the fund in the past year. The dividend yield of the Vanguard Total Stock Market index fund has been 1.71 percent over the past 12 months. For Powell's investment in the fund to generate that much income, it would have to be worth as much as $58.5 million, putting his total potential wealth at more than $112 million.

A Twitter employee deactivated Trump's account for 11 minutes (CNBC)
Twitter said President Donald Trump's personal account was deactivated on Thursday for 11 minutes because of the actions of a departing employee. The company sent out a tweet from its Twitter Government team saying that Trump's account has been restored. "We are continuing to investigate and are taking steps to prevent this from happening again," the tweet said.

Opening Bell

China fires back; Elon spouts off; Crypto goes down; Arsenal FC still crap; Broken vagina woman shares all;' and more!

Opening Bell

SEC has had enough of that whole enforcement thing; no one really wants to get rid of Libor; meet the winner of the HR violation sweepstakes; and more.

Opening Bell

Obama Wins Re-Election With Romney Defeated In Key States (Bloomberg) Obama defeated Republican Mitt Romney, winning at least 303 electoral votes in yesterday’s election with 270 needed for the victory. With one state -- Florida -- yet to be decided, Romney had 206 electoral votes...Obama won the battleground states of Ohio, Virginia, Iowa, New Hampshire, Wisconsin, Nevada and Colorado. He also carried Pennsylvania, where Romney made an 11th-hour bid for support to try to derail the president’s drive for re-election. North Carolina was the only battleground Romney won. Romney Campaigns To The End (WSJ) Hours before Mitt Romney lost his six-year quest to win the presidency, he said he had prepared only one speech—a victory speech...Until the final hour, Mr. Romney and his aides expressed confidence that he would win. The candidate, who prefers data and metrics to chitchat, appeared to be caught off guard by the loss even though he trailed in polls in crucial battlegrounds such as Ohio. Triumph Of The Nerds: Nate Silver Wins In 50 States (Mashable) The Fivethirtyeight.com analyst, despite being pilloried by the pundits, outdid even his 2008 prediction. In that year, his mathematical model correctly called 49 out of 50 states, missing only Indiana (which went to Obama by 0.1%.) This year, according to all projections, Silver’s model has correctly predicted 50 out of 50 states. A last-minute flip for Florida, which finally went blue in Silver’s prediction on Monday night, helped him to a perfect game. Loser Ryan Also A Winner (NYP) The Republican vice-presidential hopeful hedged his bet by running for re-election to his congressional seat in Wisconsin — where last night, he was declared the winner for an eighth straight time. Goldman Partners Pocket $22 Million (WSJ) More than 30 executives, including Chief Executive Officer Lloyd C. Blankfein, recently cashed in stock options awarded in the afterglow of the company's initial public offering in 1999. According to a securities filing, the executives, all Goldman partners, pocketed a total of $21.8 million by exercising options and selling the underlying shares in the three days after the firm reported third-quarter results in mid-October. The options expire at the end of November, and cashing in produced instant profits because Goldman's share price is more than 50% higher than when the options were awarded in 2002. "By exercising 10-year-old options before they expired later this year, executives captured some of the value we have built for shareholders over that period," said a spokesman for the securities firm. In contrast, many of the executives' remaining options are worthless, at least for now, because they were granted from 2005 to 2008. The stock peaked in October 2007 at about $239, or 89% higher than Tuesday's closing price of $126.25 in New York Stock Exchange composite trading at 4 p.m. The biggest gain went to Michael S. Sherwood, a Goldman vice chairman and the firm's top executive in Europe, who received $5.2 million from exercising options on 115,211 shares. Mr. Blankfein collected $3.1 million, while departing Chief Financial Officer David A. Viniar got $2.3 million, the filing shows. JPMorgan Nears SEC Settlement (WSJ) JPMorgan is close to a settlement with the Securities and Exchange Commission that would end one probe into how the company's Bear Stearns Cos. unit packaged and sold home loans to investors, according to people familiar with the case. A pact with the nation's largest bank by assets would be the first tangible victory in a wide-ranging SEC investigation into Wall Street's sale of mortgage-backed securities before the onset of the financial crisis. Since 2010, the SEC has issued more than 300 subpoenas or document requests related to the probe and collected more than 30 million pages of documents, enforcement chief Robert Khuzami said earlier this year. BNP Paribas Third Quarter Net Doubles On Trading Gains (Bloomberg) Pretax profit at BNP Paribas’s corporate- and investment- banking unit, or CIB, rose 7.3 percent to 732 million euros, beating analysts’ estimate of 686 million euros. Revenue from equity and advisory operations climbed 51 percent to 444 million euros, while fixed-income sales more than doubled to 1.13 billion euros. After Obama Victory, Donald Trump Rants On Twitter (ABC) “We can’t let this happen. We should march on Washington and stop this travesty,” Trump Tweeted. “Our nation is totally divided! Lets fight like hell and stop this great and disgusting injustice! The world is laughing at us. This election is a total sham and a travesty. We are not a democracy! And then: “Our country is now in serious and unprecedented trouble…like never before. Our nation is a once great nation divided! The electoral college is a disaster for a democracy. Hopefully the House of Representatives can hold our country together for four more years…stay strong and never give up! House of Representatives shouldn’t give anything to Obama unless he terminates Obamacare.” And finally: “This election is a total sham and a travesty. We are not a democracy!” Fitch: No Fiscal Honeymoon For President Obama (CNBC) President Barack Obama will need to quickly secure agreement on avoiding the "fiscal cliff" and raising the debt ceiling following Tuesday's elections, Fitch Ratings said. The economic policy challenge facing the president is to put in place a credible deficit-reduction plan necessary to underpin economic recovery and confidence in the full faith and credit of the U.S., according to Fitch. Resolution of these fiscal policy choices would likely result in the U.S. retaining its triple-A status from Fitch, the firm said. Failure to avoid the so-called fiscal cliff and raise the debt ceiling in a timely manner, as well as securing agreement on credible deficit reduction, would likely result in a rating downgrade in 2013, Fitch said. The New Haven For Investors (WSJ) Treasurys have a new rival for safe-haven status: U.S. companies. Bonds of Exxon Mobil and Johnson & Johnson are trading with yields below those of comparable Treasurys, a sign that investors perceive them as a safer bet. It is a rare phenomenon that some market observers said could be the beginning of a new era for debt markets. It could ultimately mean some companies will borrow at lower rates than the U.S. government. Swiss, Greeks Begin Talks On Tax Deal (WSJ) Switzerland has begun formal talks on a deal to tax assets stashed in secret Swiss bank accounts by Greek citizens, in line with similar agreements struck with other European countries, the Swiss government said Wednesday. Woman Wearing MIT Shirt Nearly Banned From Voting In Boca Raton (BNN) A woman attempting to vote in West Boca Raton yesterday was initially prohibited from entering the polling place because she was wearing a t-shirt with the letters MIT. BocaNewsNow.com heard from multiple sources that an election supervisor at the polling place ultimately realized that MIT stands for “Massachusetts Institute of Technology” — a school where students tend to know how to spell — and was not a campaign shirt for the Republican candidate, who spells his name MITT. Campaigning is not permitted within several yards of a polling place. The woman was ultimately allowed to vote.

Opening Bell

Druckenmiller buys something shiny; hedge fund scams 9/11 heroes; Harambe-shaped cheeto attracts $100k; and more.

Opening Bell

Jes Staley is swimming upstream; blockchain gets high marks on Wall Street; Venezuela's debt talks will be a nightmare; a literal interpretation of "the jig is up"; and more.