Opening Bell: 12.4.17

Meet the mother of all cyber risks; quants are wracking their brains over bitcoin; Winklevii become billionaires; the curve flattening is pretty "meh" so far; buy a digital cat for $113,000; and more.
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Bitcoin hits new high above $11,500 as the Winklevoss twins become the first bitcoin billionaires (BI)
The Winklevoss twins, who famously sued Mark Zuckerberg saying he stole the idea for Facebook from them, are now the world's first bitcoin billionaires. The former Olympic rowers disclosed in 2013 that they owned $11 million worth of bitcoin. The cryptocurrency's meteoric rise since then has propelled that investment to over $1 billion, according to the Telegraph. The Winklevoss twins are long-time bitcoin bulls and are investors in crypto exchange Gemini.

Banks Build Line of Defense for Doomsday Cyberattack (WSJ)
Especially troubling for banks is the possibility that the government could have difficulty tamping down a hack-induced panic. Agencies like the Fed and FDIC have long had mechanisms meant to restore confidence in the banking and financial system. These mechanisms, however, were designed to counter bank failures typically induced by questions about a firm’s solvency or liquidity. They don’t address the fear that a bank’s ATMs might one day stop working because of a cyberattack.

Goldman Sees U.S. Tax Cut Boosting Growth 0.3% Point in 2018-19 (BBG)
"We expect the final structure of the bill to reflect more of the Senate bill than the House bill, including a 20 percent corporate tax rate effective in 2019," the Goldman analysts wrote. While that’s down from 35 percent today, considering the expected package more broadly, the effective corporate tax rate will come down by "only a couple of percentage points," Goldman said.

Even Robots Are Joining the Bitcoin Craze as Quants Seek an Edge (BBG)
While it may not be unreasonable, at present too little data exists to prove tradable risk factors exist in bitcoin, says Campbell Harvey, an adviser at Research Affiliates and Man Group and professor at Duke University. It’s a little too convenient, Harvey says, to declare the momentum factor may be at work in bitcoin, something everyone knows has done nothing but rise in 2017. ALSO, UH: Bitcoin conferences these days are pure high voltage untarnished white hot electricity (video)

Lost Einsteins: The Innovations We’re Missing (NYT)
Not surprisingly, children who excelled in math were far more likely to become inventors. But being a math standout wasn’t enough. Only the top students who also came from high-income families had a decent chance to become an inventor. This fact may be the starkest: Low-income students who are among the very best math students — those who score in the top 5 percent of all third graders — are no more likely to become inventors than below-average math students from affluent families.

CVS Aetna Deal Tests Positive (WSJ)
The potential is clear: Bringing pharmacy benefit management and insurance under the same roof is a proven winner, as the continued strong performance of UnitedHealth Group demonstrates. Bulking up ahead of any possible entry by Amazon.com into the prescription drug business is a smart idea. But using the CVS retail presence to lower health costs offers a unique twist. After all, the easiest way to save money is to keep patients out of the hospital. Aetna’s health-care costs could drop significantly if everything goes right.

Don’t worry about ‘the flattening’ (just yet) (FT Alphaville)
Flattening concerns, essentially, should be taken with a pinch of salt because, as it stands, there is only a 10 per cent probability the curve structure is indicating a recession in the next 12 months. If you’re worried about the business cycle ending, meanwhile, more important factors to watch for are: measures of asset valuations and leverage, as well as signs of excess demand and euphoria; deteriorating financial conditions (currently benign according to the analysts); economic data such as housing permits, capital goods orders, inventories or capacity utilisation (currently strong, and potentially even strengthening).

People have spent over $1M buying virtual cats on the Ethereum blockchain (TechCrunch)
People are spending a crazy amount of real money on the game. So far about $1.3M has been transacted, with multiple kittens selling for ~50 ETH (around $23,000) and the “genesis” kitten being sold for a record ~246 ETH (around $113,000). This third party site tracks the largest purchases made to date on the game. And like any good viral sensation prices are rising and fluctuating fast. Right now it will cost you about .03 ETH, or $12 to buy the least expensive kitten in the game.

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