Opening Bell: 1.3.18

Venezuela defaults again; Mifid whiffs; Byron Wien speaketh; Guy Gentile gets that subpoena he always wanted; Silicon Valley's crazy sex parties; and much more
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Venezuela Misses Another Debt Payment, Raising Stakes for Bondholders (WSJ)
The ratings firm said Tuesday that Venezuela failed to make $35 million in coupon payments for its bonds due in 2018 within a 30-day grace period. The government and the state-owned oil company are now behind on $1.28 billion in payments, according to investment firm Caracas Capital. S&P classifies these missed payments as defaults. The firm also said there is a one-in-two chance that Venezuela will default on payments due within the next three months.

VenezuelaPancake

Mifid II launch overshadowed by futures delay (FT)
Underlining the complexity of the Mifid II reforms that touch on everything from the cost of analysts’ research to the trading of equities, Ice Futures Europe and the London Metal Exchange were given an extra 30 months to comply with rules related to trading and clearing on the very day they were due to come into force. Eurex, the Frankfurt-based futures exchange owned by Deutsche Börse, was given a similar delay late on Tuesday by BaFin, Germany’s national regulator.

Stock Fund That Beats 95% of Peers Ignores CEO Talk, Research (BBG)
“General Motors is still very undervalued and the antithesis of Tesla,” he said. “And they have a female CEO, which is quite rare. If you can make it as a CEO, i.e. as a woman, when Caucasian males are over represented as CEO’s and in boardrooms etc..., it’s probably because you are doing a very good job."

Hotshot broker served with SEC subpoena on Christmas Eve (NYP)
“This should raise some eyebrows in the Trump administration, since he keeps talking about deregulation and stopping the harassment,” Gentile griped to The Post on Tuesday. “Trump you need to fire some people!”

Meet The Crypto Billionaires Getting Rich From Ripple's XRP (Forbes)
Cofounder and former CEO Chris Larsen, who stepped down in November 2016 and now serves as executive chairman of Ripple, has 5.19 billion XRP in his personal holdings and a 17% stake in the company, according to sources at Ripple. That gives him a net worth of $37.3 billion, using Monday’s exchange rate.

Buyer Beware: Bart Does Crypto (Streetwise Prof)
OilCoin is a venture that allows the managers to use the issue of cryptocurrency to fund totally unconstrained speculations in oil subject to virtually none of the investor protections extended to the purchasers of securities in corporations, investors of closed end funds, or buyers of ETFs. All sickeningly ironic given the very public participation of a guy who inveighed against speculation in oil and the need for strict regulation of those investing other people’s money. My suggestion is that if you are really hot for an ICO backed by a blonde, buy whatever Paris Hilton is touting these days, and avoid BartCoin like the plague.

All Intel Processors Made in the Last Decade Might Have a Massive Security Flaw (Gizmodo)
There’s small screwups and big screwups. Here is tremendously huge screwup: Virtually all Intel processors produced in the last decade have a major security hole that could allow “normal user programs—from database applications to JavaScript in web browsers—to discern to some extent the layout or contents of protected kernel memory areas,” the Register reported on Tuesday.

Byron Wien Announces Ten Surprises for 2018 (Blackstone)
3. The dollar finally comes to life. Real growth exceeds 3% in the United States, which, coupled with the implementation of some components of the Trump pro-business agenda, renews investor interest in owning dollar-denominated assets, and the euro drops to 1.10 and the yen to 120 against the dollar. Repatriation of foreign profits held abroad by U.S. companies helps.
4. The U.S. economy has a better year than 2017, but speculation reaches an extreme and ultimately the S&P 500 has a 10% correction. The index drops toward 2300, partly because of higher interest rates, but ends the year above 3000 since earnings continue to expand and economic growth heads toward 4%.

“Oh My God, This Is So Fucked Up”: Inside Silicon Valley's Secretive, Orgiastic Dark Side (Vanity Fair)
“It’s awesome,” says Founder X. At work, he explains, “you’re well funded. You have relative traction.” Outside work, “why do I have to compromise? Why do I have to get married? Why do I have to be exclusive? If you’ve got a couple girls interested in you, you can set the terms and say, ‘This is what I want.’ You can say, ‘I’m happy to date you, but I’m not exclusive.’ These are becoming table stakes for guys who couldn’t get a girl in high school.”

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Wall Street Damps Pay Expectations After 2011 Bonus Shock (Bloomberg) Almost 20 percent of employees won’t get year-end bonuses, according to Options Group, an executive-search company that advises banks on pay. Those collecting awards may see payouts unchanged from last year or boosted by as much as 10 percent, compensation consultant Johnson Associates Inc. estimates. Decisions are being made as banks cut costs and firms including UBS AG (UBSN) and Nomura Holdings Inc. (8604) fire investment-bank staff. Some employees were surprised as companies chopped average 2011 bonuses by as much as 30 percent and capped how much could be paid in cash. That experience, along with public statements from top executives, low trading volumes in the first half and a dearth of hiring has employees bracing for another lackluster year, consultants and recruiters said. “A lot of senior managers won’t have to pay up because they’re saying, ‘Where are these guys going to go?’” said Michael Karp, chief executive officer of New York-based Options Group. “We’re in an environment where a lot of people are just happy to have a job. Expectations have been managed so low that people will be happy with what they get.” Goldman Pares Back Partner Picks (WSJ) The New York company is expected to announce this week the promotion of about 70 employees to partner, said people familiar with the situation. The likely total is roughly one-third smaller than the 110 employees named partner by Goldman in 2010...As of Monday, the Goldman partnership committee hadn't finished the list of new partners, said people familiar with the matter. Greece Avoids Defaults (WSJ) Cash-strapped Greece on Tuesday raised the money it needs to avoid default when a Treasury bill matures later this week, but investor nerves are unlikely to be calmed as negotiations for the next slice of much-needed aid continue. The rift among Greece's official lenders over how to pare the country's growing debt pile spilled into the open late Monday, complicating efforts for an agreement that will free up a long-delayed aid payment to the country. The European Central Bank's reluctance to provide additional money to Greek banks poses a risk to the government, which in order to keep afloat has depended on support from local banks to sell its debt. Greece Needs Another 80 Billion Euros: Goldman Sachs (CNBC) The authors of the report, economists Themistoklis Fiotakis, Lasse Holboell Nielsen and Antoine Demongeot, note that the IMF’s target is “unlikely” without such a “drastic debt stock reduction.” “To increase the likelihood that the Greek debt-to-GDP ratio approaches its 120 percent by 2020 target under realistic assumptions, a much more drastic debt stock reduction (possibly north of 80 billion euros in total) will be required,” the report states. Japan Lawmakers Agree To Avert 'Fiscal Cliff' (Reuters) Japan's ruling and opposition parties agreed on Tuesday to quickly pass a deficit funding bill in parliament, in a move that will keep the country from falling off its version of a 'fiscal cliff' as the prime minister eyes elections as early as next month. The bill is needed to borrow some $480 billion and fund roughly 40 percent of this fiscal year's budget. 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Marc Faber: Prepare For A Massive Market Meltdown (CNBC) “I don’t think markets are going down because of Greece, I don’t think markets are going down because of the “fiscal cliff” – because there won’t be a “fiscal cliff,” Faber told CNBC’s “Squawk Box.” “The market is going down because corporate profits will begin to disappoint, the global economy will hardly grow next year or even contract, and that is the reason why stocks, from the highs of September of 1,470 on the S&P, will drop at least 20 percent, in my view.” FBI Agent in Petraeus Case Under Scrutiny (WSJ) A federal agent who launched the investigation that ultimately led to the resignation of Central Intelligence Agency chief David Petraeus was barred from taking part in the case over the summer due to superiors' concerns that he was personally involved in the case, according to officials familiar with the probe. 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MF Report Coming (Reuters) A US House of Representatives panel will release a long-awaited report that will dissect the collapse of failed commodities brokerage MF Global. The House Financial Services Committee said its Subcommittee on Oversight and Investigations will post the report online Thursday. A Dose of Realism for the Chief of J.C. Penney (NYT) Andrew Ross Sorkin: "You should know you have a problem when sales at your stores fall 26.1 percent in one quarter. That was the surprising decline J.C. Penney reported last week, when it disclosed that it had lost $123 million in the previous three months...Here's the good news: In the stores that have been transformed, J.C. Penney is making $269 in sales a square foot, versus $134 in sales a square foot in the older stores. So the model itself is working. And Mr. Johnson has the support of the company's largest shareholder, Pershing Square's Bill Ackman, who personally recruited Mr. Johnson. If Mr. Johnson were starting with a blank slate, it might be a great business." China Banker Sees Lower Bar for Yuan Globalization (WSJ) "Renminbi internationalization can be realized based on a partial opening of the capital-account and partial convertibility of the currency," said Mr. Li, a delegate to the 18th Communist Party Congress and longtime advocate of a greater global role for the yuan. The Eximbank is a major arm of the Chinese government for financing trade and investment overseas. Finally, a Place in Brazil Where Dogs Can Go for Discreet Sex (NYT) Heart-shaped ceiling mirror: check. Curtains drawn against the bright day: check. Red mattress: check. The establishment that opened here this year has features that demanding clients naturally expect from a love motel. 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Barclays tops estimates; Loeb says hedge funds are in 'catastrophic' period; Guy Got Scary Mad When Told To Stop Having Sex In Public Pool: Cops; and more.

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