Opening Bell: 12.11.17

Bitcoin futures get off to a manic start; the tax bill is dumber than you could even imagine; Janet Yellen, “feminist icon”; Snap execs ordered sex on a company call; and more.
Author:
Updated:
Original:

Bitcoin Futures Start With a Bang as 26% Rally Triggers Halts (BBG)
Futures on the world’s most popular cryptocurrency surged in their debut session on CBOE’s exchange, triggering two temporary trading halts designed to calm the market. Initial volume exceeded dealers’ expectations, while traffic on CBOE's website was so heavy that it caused delays and temporary outages. “It is rare that you see something more volatile than bitcoin, but we found it: bitcoin futures,” said Zennon Kapron, managing director of consulting firm Kapronasia. ALSO: Bitcoin feeding frenzy being fuelled by 15x leverage

Goldman_Sachs-bitcoin

The Taxman Cometh: Senate Bill’s Marginal Rates Could Top 100% for Some (WSJ)
Consider, for example, a married, self-employed New Jersey lawyer with three children and earnings of about $615,000. Getting $100 more in business income would force the lawyer to pay $105.45 in federal and state taxes, according to calculations by the conservative-leaning Tax Foundation. That is more than double the marginal tax rate that household faces today.

Janet Yellen Didn’t Set Out to Be a Feminist Hero (NYT)
To protest Ms. Yellen’s departure, liberal activists have worn “Yellen wigs” in support of the economist’s signature floppy white bob (as well as her affinity for keeping interest rates low). Supporters describe her in terms more suited to Taylor Swift than a 71-year-old academic shaping monetary policy. “I’m the biggest Janet fangirl,” said Julia Coronado, founder of the economic research firm MacroPolicy Perspectives.

Jim Simons, the Numbers King (New Yorker)
His Brobdingnagian compensation is a result of a substantial stake in the company. He told me that, although he has little to do with Renaissance’s day-to-day activities, he occasionally offers ideas. He said, “I gave them one three months ago”—a suggestion for simplifying the historical data behind one of the firm’s trading algorithms. Beyond saying that it didn’t work, he wouldn’t discuss the details—Renaissance’s methods are proprietary and secret—but he did share with me the key to his investing success: he “never overrode the model.” Once he settled on what should happen, he held tight until it did.

Hedge Fund Founder and Amazon Researcher Build a Better AI Stock Picker (BBG)
Instead of asking the neural network to forecast the stock price a year out, they asked it to predict the future value of company fundamentals, getting a forecast for things like earnings, before interest and tax (EBIT). They then divided that by each company’s current enterprise value, to end up with a kind of AI-powered, forward-looking valuation multiple. They invested in the 50 cheapest stocks based on that metric.

Richard H. Thaler - Banquet Speech (Nobel Prize)
My feelings of insecurity are compounded by the invidious comparisons with this year's fellow laureates. Discoveries of colliding black holes, genes that know the time of day, and images of biomolecules at the atomic level using "cryo-electron microscopy" are rather daunting. So what did I discover to get up here? I discovered the presence of human life in a place where economists thought it did not exist: the economy.

How Will the Bitcoin Mania End? (PragCap)
The coins have no par price settlement. This is a colossal problem with any form of money. The reason we centralize money is mainly because we can create stability in its value relative to everything else. No, not the real value, the nominal value. Yes, governments sometimes do a piss poor job of this and create hyperinflation, but in general fiat currencies are extremely stable in nominal terms. You can almost always settle a payment at par even if you’re losing some marginal purchasing power over time. Cryptos currently have no par settling mechanism which makes them a pretty bad currency.

Snap execs discussed ordering hookers on business call (NYP)
The Los Angeles-based tech bros must have thought they were on mute, according to our tipster, because they began to detail their party plans among themselves, but did not realize that someone from the media company had already dialed into the call and was waiting on the The dudes — part of middle management — began talking about hookers before they were interrupted. “It was gross,” said an insider with knowledge of the conversation.

The Danish Anarchists Who Inspired SantaCon Could Not Have Imagined Its Bro-Hell Future (Atlas Obscura)
In Mother Jones, a group member told Frank that they wanted “to make demonstrations more fun and for the people” and that they “showed the cultural significance of crime.” One Danish documentary quotes the group stating that the Santa Army was a comment on the “bourgeoisie terror of Christmas and unemployment in the wake of the oil crisis.”

Related

(Trump image courtesy Flickr user Gage Skidmore)

Opening Bell: 12.21.17

Taxes taxes taxes; JPMorgan dinged over 1MDB; PE firms regret plunging into subprime auto; someone just put a million bucks on bitcoin $50,000; yes, there is a crypto dominatrix; and more.

Opening Bell: 08.31.12

JPMorgan Rankled By Risk (WSJ) JPMorgan is seeking to reduce its risks in a business that provides crucial plumbing for Wall Street's money flows. The nation's largest bank by assets, a major player in providing clearing and settlement services to other financial firms, is reviewing its dealings with dozens of brokerages that use the bank to settle trades, according to people familiar with the bank. Clearing and settlement involves standing between buyers and sellers of securities to help manage financial commitments backing hundreds of billions of dollars in transactions daily. J.P. Morgan's review, which started more than six months ago amid increased regulations, effectively seeks to assess the profits clients generate for the bank versus risks they pose, the people say. Spain Unveils Financial Reforms (WSJ) This reform fulfills the commitments made by Spain as part of a €100 billion European Union bailout for Spanish banks agreed in July. As anticipated in the bailout deal, Spain is creating an asset management company, or "bad bank," that will buy property assets from banks starting later this year at prices below book value. Euro Faces Judgment Days (WSJ) The euro zone has seen many pivotal moments since its debt crisis emerged in Greece in early 2010. But there are reasons to think this fall's events are especially vital. With Spain and Greece on the ropes, European officials face stark choices. Nomura Plans $1 Billion In Cost Cuts (WSJ) The cost cuts were unveiled Friday by Nomura's new chief executive, Koji Nagai, when he presented the blueprint for a revamped business strategy at a meeting of 450 senior branch managers, according to Nomura executives who briefed reporters on what was said. They follow another $1 billion in wholesale cost reductions the broker just finished implementing earlier this year. Shia LaBeouf 'Sent Director Sex Tapes To Get New Film Role' (Entertainment) When Shia LaBeouf took a role in Lars von Trier's latest movie 'Nymphomaniac' eyebrows were raised due to the director's previous experimentation with putting real sex on film. Until now it seemed that LaBeouf took an occupational risk in joining the movie, but if the actor's to be believed then he actively looked out for a sexed up role, and involved girlfriend Karolyn Pho...The 'Lawless' actor told Handler: "I sent him [von Trier] videotapes of me and my girlfriend having sex and that's how I got the job." French Minister: No Contradiction in 75% Tax Rate and Attracting Business (CNBC) Responding to claims that the introduction of higher tax rate could be an obstacle to business and investment in France, Moscovici echoed the French President and Prime Minister who have said that the tax was part of a “shared effort” to lead France back to positive growth. ECB Said To Use Greek Myth For Security On New Euro Banknotes (Bloomberg) The European Central Bank is using an image from Greek mythology to improve security on new euro banknotes, four people familiar with the design said, even as Greece’s near bankruptcy fuels a debt crisis that’s threatening the future of the common currency. Europa, the Phoenician princess abducted by Zeus who gave the continent its name, will replace architectural images as the watermark on the new notes, which the ECB wants to start rolling out next year, said the people, who spoke on condition of anonymity because the plans aren’t public yet. Barclays Marathon Man CEO Everything Bob Diamond Was Not (Bloomberg) “In Jenkins you’ve got the archetypal English CEO who is seen as rather safe, compared with the typically aggressive U.S. investment banker that was Bob Diamond,” said Alan Beaney, who helps manage 200 million pounds ($315 million), including Barclays shares, at RC Brown Investment Management Plc in Bristol, England. “His appointment signals that the bank is not going to be as brazen as it has been in the past.” Garlic knot beating in Vero Beach sends man with 'Fat Boy' tattoo to slammer, report shows (TCP) A man on Aug. 19 told Indian River County Sheriff's deputies he was a pizza delivery person and was taking pizza to an address in the 400 block of 9th Street Southwest in Vero Beach. The pizza deliverer said when he got there, Robert Wheeler, 48, was waiting for him outside. The pizza deliverer said that when he lowered his window, Wheeler asked him who he spoke with on the phone before punching him in the face. The pizza deliverer said Wheeler punched him "because he forgot the garlic knots." Wheeler then instructed him to "give that to the person working on the phone back at the restaurant." Wheeler, who has the word "fat" tattooed on his left arm and "boy" on his right, told investigators he hit the pizza delivery person in the face. But, he said the issue was money he said the restaurant owed him -- not forgotten garlic knots.

Getty Images

Opening Bell: 6.22.17

Warren Buffett comes to the rescue up north; Bill Ackman has a glimmer in his eye; the future of cycling is (literally) shit; and more.

Opening Bell: 01.15.13

Westminster Hits At Goldman Sachs Bonus Plan (FT) Goldman Sachs provoked a furious reaction in Westminster after it emerged that the U.S. investment bank was mulling a plan to delay its U.K. bonus payments to take advantage of the imminent cut to the top rate of tax. John Mann, a Labour member of the Treasury select committee, criticized an "opportunistic money grab" by banks at a time of intensifying public anger against the sector. Some 10 banks had previously considered delaying bonuses until the top rate falls from 50 to 45 pence - although most have since concluded that this would be damaging. Chris Leslie, shadow Treasury minister, said banks needed to think carefully about their reputations. Fitch Warns Of US Downgrade Over Debt Fight (CNBC) In a statement Fitch said the debt ceiling was "an ineffective and potentially dangerous mechanism for enforcing fiscal discipline. It does not prevent tax and spending decisions that will incur debt issuance in excess of the ceiling while the sanction of not raising the ceilingrisks a sovereign default and renders such a threat incredible." Fitch Upbeat On Ireland (Reuters) If [Ireland's] debts could be shared out among euro zone states through the region's bailout mechanisms there could be scope for Ireland's BBB-plus rating to rise into the single-A category, according to Fitch analyst Douglas Renwick. "If there is an element of risk sharing, say perhaps through the ESM (European Stability Mechanism) over a bit of time, it could rise back to the single-A (range)," Renwick said. JPMorgan Ordered To Fix Lapses (WSJ) US regulators hit JPMorgan with four formal enforcement actions targeting lapses in risk-management and money-laundering controls, including the first sanctions in response to the bank's multibillion-dollar 2012 trading debacle. One set of cease-and-desist orders from the Office of the Comptroller of the Currency and the Federal Reserve instructs the largest U.S. bank by assets to remedy the breakdowns that allowed a small group of London-based traders to rack up more than $6 billion in losses last year. Another requires the bank to beef up its antimoney-laundering procedures and mirrors an action taken last April when regulators ordered Citigroup to upgrade its transaction-monitoring procedures and enhance internal audit. None of the orders issued Monday require any fines or monetary penalties, but regulators left the door open to future action. Wells Fargo Bets On Charlotte Trading After BofA Flees (Bloomberg) \Wells Fargo is betting its securities business can thrive 600 miles from New York in the same city Bank of America's traders largely abandoned. The first of 900 Wells Fargo employees moved last month into a new space on two floors of a 48-story tower in Charlotte, North Carolina. From their windows they can see the complex a half-mile away where Bank of America built its own state-of-the- art facility less than a decade ago for about 550 traders and investment bankers. Most have since been fired or moved to New York. Police: Teacher offers sexual favors to officer to avoid DUI arrest (WPBF) According to the arrest report, an empty gallon jug of Carlo Rossi wine was found behind the driver's seat of Maloney's damaged van, which was parked on the side of the street when officers arrived. Police said Maloney refused to cooperate with officers during their DUI investigation. Police said she began yelling at them and made random vulgar statements. While she was on her way to the police station, Maloney allegedly told an officer, "How much do I need to pay you to just let me go? Don't you understand I am a school teacher?" She then offered to perform oral sex on the officer and let him fondle her breasts, the report stated. RBS Libor Fine May Hit $800M+ (Bloomberg) US and UK regulators could hit the Royal Bank of Scotland with as much as $804 million in fines next week to settle allegations traders tried to rig interest rates, two people with knowledge of the matter said. Investment banking chief John Hourican and Peter Nielsen, the head of markets, may also be asked to leave because they had responsibility for the parts of the company where the alleged wrongdoing occurred. The fine would be the second-largest levied by regulators in their investigation into allegations traders at the world’s biggest lenders manipulated submissions used to set the London interbank offered rate. UBS AG, Switzerland’s biggest lender, was fined $1.5 billion in December for rate-rigging, exceeding the 290 million pounds Barclays paid in June. Bob Khuzami, Master Blaster (NYP) Robert Khuzami yesterday took aim at a Columbia University professor who chided the SEC’s head of enforcement for not suing enough high-ranking individuals at large financial institutions, choosing instead to settle with those companies...Khuzami said in a blistering 1,500-word article in the National Law Journal that the SEC has charged a total of 102 individuals associated with the credit crisis, including high-level executives at Citigroup, Credit Suisse, Bear Stearns, and Fannie Mae and Freddie Mac...It’s the second time in as many weeks that Khuzami has called out his critics by name. Just before New Year’s Eve, the Brooklyn native blasted Simon Johnson, a professor at MIT Sloan School of Management, for a New York Times blog that said Khuzami’s hire was a “mistake” because of his former ties to Deutsche Bank. Khuzami shot back in the comment section of the blog — an unusual move for a public official. Wall Street Pay Gets Tougher Look (WSJ) Daniel Loeb, who runs hedge-fund firm Third Point LLC, has raised questions about whether compensation levels at Morgan Stanley are justified given the New York company's size and relative simplicity compared with larger bank. Hedge Funds' Manhattan Migration (WSJ) Of the new firms starting out in Manhattan, Greenwich or Stamford, about 86% picked the Big Apple, on average, from 2003 to 2008, according to eVestment, which tracks data on about 70% of U.S. hedge-fund firms. In 2009 and 2010, Manhattan was home to an average of 92% of the fund launches. Data for 2011 suggest the trend has continued. "There are blips in the data, but it's clear launches shifted toward New York after the crisis," says Peter Laurelli, eVestment's head of research. Detroit mafia boss says Jimmy Hoffa is buried in shallow grave north of Detroit (NYDN) Tony Zerilli, 85, says Hoffa was buried in a field outside Detroit, about 20 miles from the restaurant where he was last seen in July 1975. The aging Zerilli, who was in prison at the time of Hoffa’s disappearance, told TV news stations WNBC and WDIV that the plan was to move Hoffa’s body, but that never happened. “The master plan was, that I understood, was that they were going to put him in a shallow grave here. Then, they were going to take him from here to Rogers City upstate,” Zerilli said. “There was a hunting lodge and they were going to bury in a shallow grave then take him up there for final burial. Then, I understand, that it just fell through.” It was unclear why Zerilli chose to speak now about the 37-year-old mystery that has elicited dozens of false leads and conspiracy theories in the past. Zerilli said is to be ailing and penniless since his release from prison in 2008. WNBC reported he is promoting an upcoming book titled "Hoffa Found.” “All this speculation about where he is and he’s not,” Zerilli said. “They say he was in a meat grinder. It’s all baloney.”

Opening Bell: 10.04.12

France’s LBO Firms See ‘Death’ From Hollande’s 75% Carry Tax (Bloomberg) Hollande, who released his first annual budget on Sept. 28, plans to tax fund managers’ share of the profit from their investments, known as carried interest, at a rate of as much as 75 percent, part of a wider effort to increase taxes on the wealthy and narrow the country’s deficit. France also plans to as much as double taxes on capital gains and restrict the amount of debt interest payments a company can deduct from its taxable income, a measure that will reduce returns on leveraged buyouts. Facebook Test Turns Users Into Advertisers (FT) Facebook is testing a new product in the US that allows ordinary users to pay to promote their own status updates, marking a shift in the social network’s willingness to charge its users for a core service. The product has potential to generate revenues, analysts said, but could also threaten the organic feel of the site as people pay to market their own social lives. Mark Zuckerberg Confirms: 'I wear the same thing everyday' (DL) "I mean, I wear the same thing every day, right? I mean, it's literally, if you could see my closet," Zuckerberg starts to explain, as Lauer asks if he owns 12 of the same gray t-shirt. "Maybe about 20," Zuckerberg admits, somewhere between discussing the future of Facebook, his daily routine, the iPhone 5, and his wedding to college sweetheart Priscilla Chan last May. The Facebook CEO says that he doesn't really have much in his closet — it's mainly used by his wife, who graduated from medical school at the University of California at San Francisco shortly before their marriage. Instead, Zuckerberg's identical t-shirt collection lives in the one drawer he's allotted. Tiger Global Up 22.4 Percent (Reuters) Tiger Global, one of the world's best-performing hedge funds, ended the third quarter with strong gains, leaving the fund up 22.4 percent for the year, two people familiar with the numbers said on Wednesday. The roughly $6 billion fund, run by Chase Coleman and Feroz Dewan, has been the darling of the investment community for its string of strong returns at a time when the average hedge fund is delivering only low single-digit returns. In 2011, when most funds nursed losses, Tiger Global captured headlines with a 45 percent gain for the year after having made a good chunk of money on the short side, people familiar with the portfolio said. 'Dark Pool' And SEC Settle (WSJ) The Securities and Exchange Commission alleged in its order that Boston-based broker-dealer eBX LLC allowed the third-party operator of its trading platform, called LeveL ATS, to use details on client orders, including the stocks involved and whether they were buy or sell orders, to its own advantage. That operator is Lava Trading, an electronic-trading unit of Citigroup, according to eBX. eBX agreed to pay $800,000 to settle the SEC's allegations. It did so without admitting or denying wrongdoing. Mohamed El-Erian: No corner offices at PIMCO (Fortune) "It doesn't matter whether you're CEO or whether you're an associate, you have the same size office. No corner offices. Just a conference room. And then I knew that I had made the right decision when my very first outing with PIMCO, I had come from the IMF, 15 years working on emerging markets. I had a swagger, I thought I knew what I was talking about. I put forward my view, and this summer intern felt safe enough to get up and say, "You know what? Mohamed is wrong and this is why he's wrong." The fact that PIMCO had created this safe zone where a summer intern could get up and question someone who was supposed to be an expert confirmed to me that I was in the right place." Bank-Friendly U.S. Regulator Shifts Focus to Revamp Reputation (Bloomberg) In a stately hearing room stuffed with senators and bankers, Thomas Curry began his apologies. His agency should have stopped a major bank from helping drug cartels launder cash. The violations went on for years while his agency was overly passive. “I deeply regret we did not act sooner,” he said. Curry had been on the job for just over three months on that day in July, so the mistakes hadn’t been made on his watch. His apologies were less a confession than a signal the new Comptroller of the Currency -- long seen as the most bank- friendly of U.S. regulators -- was changing course. “I’m not interested in what people thought about in the past,” Curry said in an interview. “My focus is going forward.” Since he took over in March, at least two key staff members closely associated with the agency’s pro-industry stance have departed, notably chief counsel Julie Williams. Williams, a 19- year OCC veteran, was known for helping nationally chartered banks resist state regulation by arguing they were preempted by often less-stringent federal rules. Curry has also raised the profile of consumer protection and shifted focus toward “operational risk” -- the idea that bank practices and management can pose as much of a threat to safety and soundness as external forces. Argentine Navy Ship Seized In Asset Fight (FT) An Argentine naval vessel crewed by more than 200 sailors has been seized in Ghana as part of an attempt by the US hedge fund Elliott Capital Management to collect on bonds on which Buenos Aires defaulted in 2001. A Ghanaian court ordered an injunction and interim preservation order against the ARA Libertad, a 100-metre long tall ship, following an application by Elliott subsidiary NML Capital on Tuesday. The hedge fund, run by the US billionaire Paul Singer, has been closely monitoring the course of the Libertad, according to sources familiar with the firm. Elliott had been waiting for the ship to stop in a port where it would have a chance to enforce legal judgments previously awarded by UK and US courts. The hedge fund declined to comment. Argentina slammed the interception of the Libertad as a “trick which these unscrupulous financiers” had pulled, adding that it “violates the Vienna Convention on diplomatic immunity”. Morgan Stanley commodities talks with Qatar hit snag (Reuters) Morgan Stanley's talks with Qatar's sovereign wealth fund over the sale of its commodities business have run into difficulty, and the deal may need to be reworked if it is to go ahead, banking sources said. One of the top banks in commodity trading over the past 30 years, Morgan Stanley has been in discussion for more than a year with Qatar over the sale of at least a majority stake in the energy-focused trading business, the bankers said. "There have been some differences, and Qatar is a bit lukewarm about it," one said. "It's not dead yet but definitely not imminent." Maple syrup stolen in Quebec seized by police in New Brunswick (The Star) Quebec police have seized between 700 and 800 barrels of maple syrup from a New Brunswick exporter, linking the drums to August’s massive heist of the sweet stuff. Étienne St-Pierre, owner of S.K. Exports in Kedgwick, N.B., told the Star that police executed a search warrant Sept. 26 and hauled away the barrels. “They said they were searching to find some stolen drums from Quebec,” he said. “It was a surprise. That was the first news I received.” St-Pierre said each barrel weighs about 270 kilograms and holds 170 litres of syrup, meaning police seized at least 119,000 litres of gooey Quebec gold. A spokesperson for the Sûreté du Québec, Sgt. Bruno Beaulieu, confirmed a search warrant had been executed in Kedgwick but said he could not comment on the investigation. The Federation of Quebec Maple Syrup Producers has never revealed the amount of syrup stolen from its secure St-Louis-de-Blandford, Que. warehouse in August. The facility held about 3.75 million litres of syrup, enough to fill one and a half Olympic swimming pools. St-Pierre said he obtained the barrels from a regular Quebec supplier, who he refused to identify.

By Federalreserve (FED_9638) [Public domain], via Wikimedia Commons

Opening Bell: 6.16.16

Turnaround bankers are so hot right now; Janet Yellen say sit tight; Man converts tree stump into tribute to Boston sports teams; and more.

Opening Bell: 2.10.16

Morgan Stanley trading exec says run for lives; Big firms raise debt funds; Yellen to talk rate hikes with congress; Man Accused Of Tossing Gator Into Wendy's Drive-Thru Window; and more.