Holiday Bell: 11.25.20

Trump starts taking credit for Biden rally; Steve Cohen gets some Black, uh, start; bonjour a Paris, Monsiers et Madames Goldman; and more!

Author:
Dealbreaker
Publish date:
Nov 25, 2020

Sir Beluga, CC0, via Wikimedia Commons

Trump starts taking credit for Biden rally; Steve Cohen gets some Black, uh, start; bonjour a Paris, Monsiers et Madames Goldman; and more!

Biden’s Stock Market Is Off To A Faster Start Than Trump’s [Forbes]
Since Trump likes to talk about how the stock market has performed since he was elected on November 8, 2016, it is interesting that the Dow Jones Industrial Average has actually been stronger in the three weeks since this year’s election with Biden becoming the President-elect vs. when Trump was elected in 2016.
Starting with the day after Trump’s and Biden’s respective election day, November 8 and 3, respectively, Trump saw a 4.3% increase in the Dow while Biden has seen a 9.3% increase over the next three weeks…. Over that weekend it became clear that Biden had beaten Trump, even though Trump was tweeting there were multiple instances of extensive voter fraud (which were disputed at the time and none have been found). Starting from then to three weeks after the election the Index rose 1.5% under Trump. However, over the same timeframe the Index has risen 6.1% this year.

Trump brags about Dow 30,000 at surprise news conference, leaves after a minute [CNBC]
Trump has repeatedly claimed that if Biden won the election, the stock market and the economy would “crash….”
“I just want to congratulate everybody. The stock market, Dow Jones Industrial Average just hit 30,000, which is the highest in history,” Trump said in the briefing room…. “The stock market’s just broken 30,000 — never been broken, that number. That’s a sacred number, 30,000, and nobody thought they’d ever see it,” Trump said.

JPMorgan Chase to pay $250 million for failings in asset, wealth business [Reuters]
The Office of the Comptroller of the Currency (OCC) said it found that JPMorgan’s risk management practices were “deficient and it lacked sufficient controls to avoid conflicts of interest….” For several years… JPMorgan operated a weak management and control framework for its fiduciary activities and had an insufficient audit program for, and inadequate internal controls over, those activities, the OCC said.

ECB warns bank profits will ‘remain weak’ throughout next year [CNBC]
“I think they have to make a wholehearted effort to reduce the costs they are having now, to improve the cost-to-income ratio, to get rid of the excess capacity, so there are some measures that they have to take rapidly,” [ECB Vice President Luis de Guindos] said…. However, “with the recent resurgence in infections and new containment measures, it is likely that profitability forecasts will be revised downwards, as it is also uncertain when a vaccine will be available for a larger share of the population,” the ECB warned in its report.

Staff of hedge fund Blackstart Capital join Steve Cohen’s Point72 [BI]
Blackstart Capital, which listed $319 million under management on a recent disclosure form, has terminated its registration with the Securities and Exchange Commission…. Jamie Waters, a partner and portfolio manager there, said on his LinkedIn profile that he and some number of others moved to Point72 earlier this month, and Point72 confirmed the move to Business Insider.

Goldman Sachs to open Paris stocks hub to avoid Brexit disruption [Reuters]
“We want to ensure that our clients continue to have access to all of our key liquidity sources post-Brexit,” said Liz Martin, Goldman’s global co-head of futures and equities electronic trading…. Brussels has said that EU investors should use a platform inside the bloc to trade shares denominated in euros, thereby splitting markets and forcing major players like Goldman to have a foot in both camps.

Gig Workers Could Be Paid Partially in Stock Under SEC Proposal [WSJ]
So-called gig-economy workers currently don’t qualify for SEC exemptions that allow private firms to offer equity compensation to their employees and contractors…. The SEC’s proposed rule would allow internet-based platform companies to pay as much as 15% of a gig worker’s annual compensation in the form of equity, up to a limit of $75,000 over three years. It would be limited to workers who provide bona fide services through the company’s platform, rather than people who use apps to sell goods….
It is unlikely to advance in its current form, however, because the 60-day public comment period won’t allow the SEC to complete the rule before Mr. Clayton departs around the end of the year. His successor will be appointed by the administration of President-elect Joe Biden, a Democrat…. The SEC’s two Democratic commissioners, Caroline Crenshaw and Allison Herren Lee, voted against the proposal, saying that the subset of companies chosen to benefit from the new exemption appeared arbitrary.

With US in COVID-19 panic, Sen. Perdue saw stock opportunity [AP]
For the second time in less than two months, Perdue’s timing was impeccable. He avoided a sharp loss and reaped a stunning gain by selling and then buying the same stock: Cardlytics, an Atlanta-based financial technology company on whose board of directors he once served…. Legal experts say the timing of his sale, the fact that he quickly bought Cardlytics stock back when it had lost two-thirds of its market value and his close ties to company officials all warrant scrutiny….
Perdue’s opponent, Democrat Jon Ossoff, has seized on his stock trading while trying to brand him as a “crook.”

We’re taking the rest of the week off to consider the four or five things left to be thankful for. Enjoy your lonely microwavable Thanksgiving dinners. We know we will. Well, we don’t know. We think. Hope. Anyway, see you Monday.

Opening Bell

Biden’s regulatory bench Blooms; Omicron makes things easier (unless you work at Goldman Sachs); Credit Suisse is litigiously pissed; Kap SPAC kicks the bucket; and more!

By Gage Skidmore from Peoria, AZ, United States of America (Make America Great Again hat) [CC BY-SA 2.0], via Wikimedia Commons

Opening Bell

Introducing the MAGA ETF; subprime is back, baby; Steve Cohen is once again raising eyebrows; floating masses of fire ants are stalking the waters around Houston; millennials are killing language as we know it; and more.

By World Economic Forum (Flickr: The Global Financial Context: James Dimon) [CC BY-SA 2.0], via Wikimedia Commons

Opening Bell

Stimulus signed; Boris’ non-existent blueprint; more bad news for Marianne Lake; bitcoin bull begs Biden’s indulgence; judge tries restraining Bill Gross; and more!

Opening Bell

M&A to rally into new year; inflation, too; judge hurts Hertz creditors; Dan Loeb’s feelings are hurt; and more!

Opening Bell

FBI Tried To Flip Trader Against Cohen (WSJ) A year before the government charged Mathew Martoma with insider trading, it tried to get him to turn against his former boss, Steven A. Cohen. Federal agents, including Federal Bureau of Investigation case agent Matthew T. Callahan, turned up at the Boca Raton, Fla., home of Mr. Martoma, a former portfolio manager at an affiliate of SAC Capital Advisors L.P. Agents tried and failed to persuade him to be a cooperating witness in the government's effort to build a criminal case against Mr. Cohen, the founder of SAC and one of the biggest names in the hedge-fund world, said people close to the case...The government's attempt to engage Mr. Martoma as a cooperating witness shows the high level of focus placed on Mr. Cohen, whose $14 billion fund has posted some of the best returns on Wall Street. It also demonstrates how the government has been unable so far to implicate Mr. Cohen in Mr. Martoma's alleged wrongdoing...Each of the two securities fraud charges against Mr. Martoma carry a maximum of 20 years in prison; federal sentencing guidelines, based on the amount of the alleged illegal profits, recommend a sentence of 15 to 19 years. By contrast, most people who have pleaded guilty to insider trading and cooperated with the government have been sentenced to little or no jail time. Mr. Martoma is married with children. "Twenty years is a very long time in prison," said Thomas Gorman, a partner at Dorsey & Whitney LLP in Washington, referring to the sentence Mr. Martoma could serve if convicted. "There will be an enormous amount of pressure to earn a cooperation credit to try to mitigate that." Cohen’s ’Elan Guy’ Martoma Dropped Ethics for Hedge Fund (Bloomberg) Martoma got his undergraduate degree at Duke University in Durham, North Carolina, according to the university registrar. During his first year, he was inducted into Phi Eta Sigma, an honors society for freshmen who attain at least a 3.5 grade point average, according to the university registrar. He graduated in December 1995. Less than two years later, he went off to Harvard Law School in Cambridge, Massachusetts. He wrote two medical-ethics papers, one of which identifies him as a member of Harvard Law’s class of 2000 and as the former deputy director of the National Human Genome Research Institute’s Office of Genome Ethics. He left Harvard in December 1998 without attaining a degree, according to the school’s registrar, and attended Stanford Business School, where he joined three alumni groups including MBA Class of 2003, according to university records. In 2001, he changed his name from Ajai Mathew Mariamdani Thomas...Former colleagues, who asked not to be named because the fund is private, said the Martoma, who stood almost six feet tall, had a quiet demeanor and left little impression except for an outsized trade that earned him the name “the Elan guy.” Trading Case Casts a Deeper Shadow on a Hedge Fund Mogul (NYT) Thus far, any potential evidence against Mr. Cohen is entirely circumstantial. The government's complaint includes e-mails about secretly selling the Elan and Wyeth shares through esoteric methods like algorithms and dark pools. But that is common practice among large, sophisticated funds that do not want to alert competitors or move the stock too much. Moreover, while SAC dumped its large positions in the two stocks quickly - raising the question of what prompted it to do so - Mr. Cohen is known for a rapid-fire trading style. He frequently moves aggressively in and out of stocks while processing gobs of information fed to him by his underlings. It would be difficult for a jury to infer anything incriminating just from the way these trades were executed. The government in this case also lacks the powerful wiretap evidence that it has used to convict dozens others, including Raj Rajaratnam, the head of the Galleon Group. Greek Bond Buyback In Doubt (WSJ) The rally in outstanding Greek bonds has made any buyback plan more expensive, eroding the impact it would have on Greece's debt. It raises the challenge for euro-zone finance ministers to seal a deal at their next meeting on Monday that would both plug holes in Greece's €246 billion ($316.95 billion) bailouts and bring the country's debt load to a more manageable level. S&P Confirms France's AA-Plus Rating (WSJ) The decision removes the immediate threat of another downgrade of France, though S&P kept a negative outlook on the country's debt. That indicates a one-in-three chance of a cut in France's credit rating during 2013. Diamond, Dimon’s Early Risks Made Them Better: Adoboli (Bloomberg) Adoboli, who was jailed Nov. 20 for causing the largest unauthorized trading loss in British history, said in an e-mail exchange with Bloomberg News that Jamie Dimon, Bob Diamond and Yassine Bouhara, the former co-head of global equities at UBS, all lost large amounts of money at some point in their careers. The more senior you are the easier it is to avoid getting slammed to the wall,” Adoboli wrote in a Nov. 14 e-mail. “Funny thing is though, losing money seems to make you better at making money. Perhaps that’s why traders who lose money always get rehired, as long as they still have their risk appetite.” Canada Police Arrest Man Who Told Kids Santa Isn't Real (Star) As Christmas-themed floats slowly rolled down Princess St. during Kingston’s annual Santa Claus parade, an intoxicated man shouted blasphemous lies to shocked children: Santa doesn’t exist. The man, whose gelled hair “looked like a set of devil horns protruding from his head,” was reported to Kingston police, Const. Steve Koopman said. Police arrested a 24-year-old man around 6 p.m. “It was pretty despicable that someone, during this time of the year, would tell kids Santa isn’t real — which of course we would argue,” Koopman said. Higher Gas-Tax Idea Joins Fiscal-Cliff Talks (WSJ) Other industries also are moving to have initiatives attached to a budget deal—as part of either a short-term agreement this year or a longer-term plan reached next year to overhaul spending and taxes. Casinos are pushing a measure to legalize Internet poker games nationally. Small banks are pressing to extend a program that gives unlimited federal guarantees to certain bank deposits. Governors want additional aid to cover destruction wrought by Hurricane Sandy. The financial industry is pushing to loosen regulations on complex financial derivatives. "Basically, you've got a bunch of people waiting in the wings to stick the collection plate out and grab whatever they can grab," said Dan Kish, senior vice president for policy at the Institute for Energy Research, which advocates for free-market energy policies. Jain Gets Silent Treatment as Bankers Eat Humble Pie (Bloomberg) Deutsche Bank co-Chief Executive Anshu Jain says telling people he works in banking is a conversation-killer at parties, as the industry fails to convince the general public that it’s changing. “If you go to a party these days, you’re asked what you do and you say you’re a banker, people go all quiet,” Jain said before a conference on Europe’s finance industry began in Frankfurt. “We’re still the subject of anger.” Judge Rules For Singer (Reuters) A federal judge has ordered Argentina to pay holders of defaulted bonds, including Paul Singer’s Elliott Management, immediately, a blow to the country’s efforts to overcome a 2002 debt crisis that has raised fears of another default. In a ruling Wednesday, Judge Thomas Griesa lifted a previous order stalling payments to so-called holdout investors who refused to take part in two swaps of defaulted debt. Argentina’s president, Cristina Fernandez, has said her government will not pay “one dollar,” and Griesa’s ruling cited threats by Argentina’s leaders to defy his rulings in the decade-old dispute. Germany Halts Swiss Tax Deal (WSJ) The bilateral treaty was vetoed by the left-leaning Social Democrat and Green opposition parties in the Bundesrat, which represents Germany's 16 states. The treaty's opponents argue that it is too lenient on tax evaders. We want a treaty that is "more painful to Swiss banks and German tax evaders," Norbert Walter-Borjans, the Social Democrat finance minister of the German state North Rhine-Westphalia said in a debate in the upper house preceding the vote Friday. A ‘Whale’ of a Chase is on (NYP) JPMorgan Chase turned its chief investment office into a proprietary-trading unit that caused more than $6.2 billion in losses, pension funds said in a revised complaint in their suit against the bank. JPMorgan contended the unit’s primary role was managing risk when in fact it was engaging in trades to generate profit for the bank, the funds said in an amended complaint filed in Manhattan federal court. CEO Jamie Dimon “secretly transformed the CIO from a risk management unit into a proprietary-trading desk,” the plaintiffs said. The pension funds allege they incurred losses in their holdings because of trades by the chief investment office and Bruno Iksil, known as “the London Whale.” Porn star vows night of passion if Barcelona wins (NYDN) Colombian-born Janeira Ventura said she would give "any Barca fan who dares" the "night of their lives" if Lionel Messi, Andres Iniesta and co. fire them to the top of La Liga by the end of the season. The adult actress told Mundo Deportivo, "If we win the league this year, I pledge publicly to spend a night of passion with any Barcelona member or supporter who dares. "How can they prove they support the team? It's easy, by showing me the membership card or photos and tickets to a game. They just have to contact me on my website." The 27-year-old was born in Barranquilla, moved to Spain when she was a baby and now lives in Toronto. She added, "I've been a Barcelona fan since I was little, I love the team, the way they play, and above all I love the players. The most sexy ones? Messi, Xavi and Puyol." Her obsession extends to having two cats, who are called Leo and Messi, and plans to tattoo the Argentine striker's name "in a secret place" when she returns to Spain in 2013. She also wants to convince Barcelona bosses to let her be their "official club porn star."