October 21, 2021
Opening Bell: 10.5.21

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Opening Bell: 10.5.21

Default chicken; all night long; Gary Gensler wants to cut your pay; and more!
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Schumer Plans to Seek Debt-Limit Vote McConnell Vows to Kill [Bloomberg]
President Joe Biden earlier in the day warned that the U.S. government is at risk of breaching the cap on its borrowing authority in two weeks, blaming McConnell for what he described as a “meteor” headed for the economy…. It would take 60 votes to succeed with Schumer’s latest try, and the Senate is split 50-50 between the two parties. McConnell said Republicans won’t support an effort to bypass that requirement by unanimous consent, as Democrats did several times in the early 2000s when the GOP controlled the Senate.

Is the Stock Market Open at 3 a.m.? This Startup Says It Should Be [WSJ]
“If there is big news over the weekend, you can try to trade, but you really can’t,” the founder and chief executive said…. Currently, investors can trade as early as 4 a.m. ET and as late as 8 p.m. ET, thanks to premarket and post-market trading sessions offered by the New York Stock Exchange and other market operators. Because of thin liquidity, though, prices in these sessions tend to be volatile….
24 Exchange is also seeking the SEC’s permission to allow fractional trading on its proposed stock exchange in increments of as little as 1/1000th of a share.

SEC’s Gensler Aims to Save Investors Money by Squeezing Wall Street [WSJ]
Mr. Gensler, less than six months on the job, says he wants to make the capital markets less costly for companies raising money as well as for ordinary investors saving for retirement. His main targets are what he says are profits and salaries earned above what a purely competitive market would allow, known as economic rents…. “If private equity had lower fees,” Mr. Gensler said, “the pension funds would get more. Now, maybe the private-equity general partners would get a little less.”

Warren urges SEC to open insider trading probe into Fed Vice Chair Clarida, others [CNBC]
“There is no justifiable ethics or financial rationale for [Richard Clarida] or any other government official to be involved in these questionable market machinations while having access to non-public information and authority over decisions that have extraordinary impacts on markets and the economy,” Warren wrote…. Clarida’s transactions “were executed prior to his involvement in deliberations on Federal Reserve actions to respond to the emergence of the coronavirus and not during a blackout period,” a Fed spokesman said in an emailed statement. “The selected funds were chosen with the prior approval of the Board’s ethics official.”

Tesla Ordered to Pay More Than $130 Million in Damages to Black Former Worker [WSJ]
[Owen Diaz] was regularly called racial epithets at work, where he saw racist images and language written in the bathroom and elsewhere, said Bernard Alexander, one of his attorneys, during the trial…. “It shines a light on what’s going on inside of Tesla’s factory,” he said. “Elon Musk, you’ve been put on notice. Clean that factory up….”
It is the second time in recent months that the electric-vehicle maker has been found liable in a case involving claims of race-based harassment or discrimination.

Two 'prolific' ransomware operators arrested in Ukraine, Europol announces [CNN]
The FBI and law enforcement agencies in France and Ukraine coordinated the raid, which led to the seizure of $375,000 in cash and two luxury vehicles, and the freezing of $1.3 million in cryptocurrencies, according to Europol…. Europol described the two suspects as "prolific," having demanded between €5 and €70 million ($5.8 million and $81.3 million) from victims. But a spokesperson for the EU's law enforcement arm declined to identify the two people or what type of ransomware they allegedly used, citing legal reasons and an ongoing investigation.

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RBS Managers Said To Condone Manipulation Of Libor Rates (Bloomberg) In an instant-message conversation in late 2007, Jezri Mohideen, then the bank’s head of yen products in Singapore, instructed colleagues in the U.K. to lower RBS’s submission to the London interbank offered rate that day, according to two people with knowledge of the discussion. No reason was given in the message as to why he wanted a lower bid. The rate-setter agreed, submitting the number Mohideen sought, the people said. Mohideen wasn’t alone. RBS traders and their managers routinely sought to influence the firm’s Libor submissions between 2007 and 2010 to profit from derivatives bets, according to employees, regulators and lawyers interviewed by Bloomberg News. Traders also communicated with counterparts at other firms to discuss where rates should be set, one person said. Gary Gensler Calls For Libor Replacement (WSJ) "It is time for a new or revised benchmark—a healthy benchmark anchored in actual, observable market transactions—to restore the confidence of people around the globe," Mr. Gensler said. "There are no rules requiring controls, firewalls, independent testing, policies and procedures, or a methodology ensuring that submissions are transaction-focused, as the benchmark was originally intended," he said. German Banks Have Big Exposure To Spain (WSJ) German lenders have the highest exposure in Europe to Spain, at $139.9 billion, of which $45.9 billion alone is exposure to banks, according to the Bank for International Settlements. Easier Eton Exits (NYP) Eric Mindich’s $11 billion Eton Park Capital Management has rolled back its complicated lock-up period for most investors by more than a third. Starting in early 2013, those investors will be able to withdraw their cash in 21 months, down from a three-year lock-up period...“It’s an attempt to keep people in by relaxing the terms and conditions,” said Brian Schapiro, president of Simplify, a hedge-fund research provider, of the Mindich move. But the lock-up rollback, aimed to quell investor rage, hasn’t made them all happy. “They’ve gone from a three-year lock to a two-year lock. Big deal,” said one investor who’s been taking as much money out as he could for several years. For Investors, A New Pick Of The Crop (WSJ) Fresh apple consumption in China, which produces more than half of the global supply of the fruit, has soared 80% from the 2007-2008 crop year to the crop year ending in June 2012, according to the U.S. Department of Agriculture. That compares with growth of just 36% world-wide in the same period. The surge is shaking up a small corner of the commodities world, the market for apple-juice concentrate in the U.S., and has led to the first-ever futures contract for the product. LI youth baseball coach spent $50G on ‘revenge’ kids team (NYP) Angered after his own son failed to flourish on the Long Island Infernos traveling baseball team for 10- and 11-year-olds, Robert Sanfilippo used his own money to create and fund the Long Island Vengeance to even the score against his boy’s former squad, a law-enforcement source said. Obsessed with vanquishing the Infernos, Sanfilippo aggressively recruited players in newspaper ads and appealed to kids cut from other teams, sources said. While the players’ parents usually fork out for traveling teams, Sanfilippo — who resides in a pricey Huntington home — footed the entire bill for the Vengeance. “No one could understand why this guy was spending so much money on 10-year-olds,” said another coach. “It was all about revenge.” Sanfilippo faces harassment and stalking charges after he allegedly sent threatening messages to rival coach John Reardon. The pair had argued during a Memorial Day baseball game.While other Long Island teams had modest equipment, Sanfilippo spent like a Suffolk County Steinbrenner. The Vengeance sported top of the line helmets with airbrushed skull and crossbones insignias that cost upwards of $300 each for a team of roughly 20 kids. The squad also provided each player with two uniforms and baseball bags worth hundreds of dollars. Merkel: Europe Must Take ‘Deep Breath’ and Enact Reforms (Reuters) Speaking at a meeting of the Federation of German Industries (BDI), Merkel acknowledged that Germany was "not an island" that could disconnect from economic developments in Europe and the world economy. But she placed the onus on Berlin's struggling euro zone partners to fix their own economies, rejecting the idea that Germany should relax its own productivity drive in order to help its partners. "We need to take a deep breath to overcome this crisis," Merkel said. "We must make the efforts that will allow Europe to come out of this crisis stronger than it went in. Key Galleon Witness Gets Probation (WSJ) U.S. District Judge Barbara Jones sentenced Rajiv Goel to two years of probation, fined him $10,000 and ordered him to forfeit $266,649. She said he had the "good sense" to cooperate once he was caught, and called that type of cooperation "essential" to complicated white-collar-crime investigations. CIT Soars On Target Talk (Bloomberg) Just remember: nothing happens until John Thain gets taken care of. Bacon, pork shortage 'now unavoidable,' industry group says (LA Times) Might want to get your fill of ham this year, because "a world shortage of pork and bacon next year is now unavoidable," according to an industry trade group. Blame the drought conditions that blazed through the corn and soybean crop this year. Less feed led to herds declining across the European Union “at a significant rate,” according to the National Pig Assn. in Britain...In the second half of next year, the number of slaughtered pigs could fall 10%, doubling the price of European pork, according to the release. Click here to sign up for Dealbreaker's Opening Bell daily email. It's the same exact thing as above, but delivered to your inbox, which is moderately exciting.

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