Wells Fargo CEO Finds Himself on Defense After a Tough First Year [WSJ]
Mr. Scharf’s defenders said he is laying the groundwork for the company’s rebound. Much of the progress, they said, is happening behind the scenes—in the vast web of systems and technology that is meant to catch problems like the 2016 sales scandal…. But 2020 has tested Mr. Scharf in unexpected ways.
Unemployment Claims to Remain Historically High [WSJ]
Economists expect applications for jobless benefits—seen as a proxy for layoffs—ticked down to 825,000 last week from 837,000 a week earlier. Weekly jobless claims are down sharply from a peak of nearly seven million in March but have clocked in at between 800,000 and 900,000 for more than a month…. “It’s more of the same, but it’s also still jaw-dropping that we have that many new claims even now, as we’re six, seven months into this whole recession and recovery,” said Eliza Forsythe, an economics professor at the University of Illinois, Urbana-Champaign.
Space Stock Boom Gets Serious With Another Billionaire-Backed Startup [Observer]
Momentus, a Santa Clara, Calif.-based company specializing in the “last-mile delivery” in space, announced on Wednesday that it will go public through a reverse merger with the special purpose acquisition firm Stable Road Capital in a deal valuing the space company at $1.2 billion…. Momentus’s largest investor is Prime Movers Lab, a venture capital firm backed by high-profile investors including hedge fund billionaire Bill Ackman and Palantir co-founder Joe Lonsdale.
Little-Known Investment Firm Centricus Circles TikTok With Long-Shot Bid [WSJ]
London-based Centricus Asset Management Ltd. has revised an offer several times in recent weeks based on feedback from Zhang Yiming, CEO of TikTok parent ByteDance Ltd., and his advisers…. People close to Centricus say they see the firm’s odds of success as low. Centricus executives believe that if the Chinese government ultimately blocks the Oracle deal, their bid could be seen as a potential middle path, one that preserves value for the existing investors and satisfies U.S. concerns that TikTok’s data not be in Chinese hands, while also preventing an American takeover of one of China’s most successful tech companies.
SEC Committee Tackles Disorderly Electronic Bond Trade Reporting [WSJ]
The committee proposed the SEC adopt a clear definition of electronic trading in corporate and municipal bond markets. A uniform definition would capture a broader range of trades, avoid double-counting them and standardize reporting across different venues…. “The recommendation this week is trying to tackle the fact that electronic venues all report their trading volumes and estimates differently, so it’s very difficult for any market participant or regulator to get an accurate picture of what’s going on,” said Rick McVey, chief executive officer at MarketAxess and a member of the SEC committee.
Vatican used charity funds to bet on Hertz credit derivatives [FT]
The Vatican invested some donations for the poor and needy in derivatives that bet on the creditworthiness of Hertz…. In 2018, Pope Francis said credit default swaps “encouraged the growth of a finance of chance and of gambling on the failure of others, which is unacceptable from the ethical point of view”. The instruments, he said, were “a ticking time bomb”.
But three years earlier, part of a €528m Vatican portfolio “derived from donations” bought structured notes containing CDS as part of a bet that Hertz would not default on its debts by April 2020, the documents show. The company filed for bankruptcy the following month, giving the Holy See a narrow escape on the investment, which paid out in full.
A Columnist Makes Sense of Wall Street Like None Other (See Footnote) [NYT]
Matt [Levine] is one of the best writers today chronicling the ironies, paradoxes and absurdities of modern business and finance,” wrote one of them, the hedge fund manager Jim Chanos, in an email. “His work is some of the most sophisticated analysis of what is really happening on Wall Street,” said Bill Ackman, another billionaire fund manager….
The idea of leaving Wall Street for a precariously capitalized blog would probably strike a lot of financiers as romantic, quaint, even idiotic. But Mr. Levine was never a high roller. He never joined an elite social club or spent six figures on a Hamptons summer rental. And so, at 33, Mr. Levine sat down to write.
It took Mr. Levine exactly one week to find his voice. [Ed. note: Kvelling.]