Opening Bell: 12.2.21

Shutdown shutdown; Tony James goes out to pasture; a Clayton/Gensler kaffeeklatsch; Square goes 3-D; and more!

Author:
Dealbreaker
Updated:
Dec 3, 2021
Original:
Dec 2, 2021

Shutdown shutdown; Tony James goes out to pasture; a Clayton/Gensler kaffeeklatsch; Square goes 3-D; and more!

House Democrats announce plan to fund the government, prevent a shutdown [NBC News]
Preventing a government shutdown this week, however, isn’t guaranteed. Republicans in the House and the Senate have signaled that they want to delay passage of a spending bill over objections to the Biden administration's Covid-19 vaccine mandates for workers…. "This is so silly that we have people [who] are anti-science, anti-vaccination, saying they're going to shut down government over that," [House Speaker Nancy Pelosi] added.

Tony James to retire as Blackstone executive vice chairman [Reuters]
James, who joined Blackstone in 2002 as president and chief operating officer, led the firm's initial public offering and the acquisitions of its $178 billion credit business, previously known as GSO, as well as its secondaries arm, Strategic Partners. He also helped establish Blackstone's $34 billion tactical opportunities division…. James, 70, handed over his roles as Blackstone president and chief operating officer to Jonathan Gray in 2018. Gray is now heir apparent to [founder Stephen] Schwarzman.

Biden’s Candidates for Fed Supervision Post Include Bostic, Bloom Raskin, Corday [Bloomberg]
President Joe Biden is considering Federal Reserve Bank of Atlanta President Raphael Bostic and Duke University law professor Sarah Bloom Raskin to be the Fed’s top banking regulator, along with former Consumer Financial Protection Bureau director Richard Cordray and others…. Other candidates for board slots include Valerie Wilson, director of the left-leaning Economic Policy Institute’s Program on Race, Ethnicity, and the Economy; Lisa Cook, a professor of economics and international relations at Michigan State University; William Spriggs, chief economist at the AFL-CIO and Karen Dynan, a former top Treasury official under President Barack Obama and an economics professor at Harvard University.

Biden and Trump S.E.C. Chiefs Trade Tips on How to Regulate Crypto [DealBook]
Mr. Clayton asked his successor whether the S.E.C. intended to regulate crypto, Mr. Gensler replied, “I don’t think you mind if I would quote you back to you.”
Mr. Gensler then expressed a view that the former chairman has long articulated — one that blockchain businesses strongly resist — that cryptocurrency tokens are “largely” used to raise money for entrepreneurs and, as such, meet “the time-tested definitions of an investment contract and are thus under the securities laws.”
Indeed, Mr. Clayton did not mind, and added: “Yeah. And any other of the array of definitions of a security in addition.”

Apollo to Buy Griffin Capital Units in Push to Reach Wealthy Individuals [WSJ]
A closely held investment firm based in Los Angeles, Griffin has about 60 client-facing employees focused on distributing investment products tied to assets such as private credit and real estate to wealthy individuals. It has a particular focus on independent broker dealers, a distribution channel in which Apollo and its main rivals currently have less of a foothold than they do with private banks or big brokerages…. As part of the deal, Apollo will also get technology, other infrastructure and hundreds of distribution agreements to bolster its Global Wealth platform.

Jack Dorsey’s Square changes its name to Block [BBC]
Individual businesses owned by Block, "building blocks", as the company put it, such as Square and music-streaming platform Tidal, retain their original names….
"Block is a new name but our purpose of economic empowerment remains the same,” [Dorsey said.]
"No matter how we grow or change, we will continue to build tools to help increase access to the economy."

Opening Bell

Juneteenth; Hertz goes cap-in-hand; that $2 billion doesn’t exist; D.J. D-Sol’s not-so-star turn; and more!

Opening Bell

HSBC readying the pink slips; Kashkari pushes complete shutdown; Apple takes bite out of Dow; Mercers return to their hole; and more!

Opening Bell

Yellen looks to September; Goldman is probed over Malaysia State Fund; Amputee penguin will get new 3-D printed foot; and more.

Opening Bell

Charlie Scharf makes a deal; Tether, Bitfinex, too; plan B at OMB; Gary Gensler sharpening his knives for p.e.; and more!

Opening Bell

On Wall Street, Time To Mend Fences With Obama (NYT) Few industries have made such a one-sided bet as Wall Street did in opposing President Obama and supporting his Republican rival. The top five sources of contributions to Mr. Romney, a former top private equity executive, were big banks like Goldman Sachs and JPMorgan Chase, according to the Center for Responsive Politics. Wealthy financiers — led by hedge fund investors — were the biggest group of givers to the main “super PAC” backing Mr. Romney, providing almost $33 million, and gave generously to outside groups in races around the country. On Wednesday, Dan Loeb, who had supported Mr. Obama in 2008, was sanguine. “You win some, you lose some,” he said in an interview. “We can all disagree. I have friends and we have spirited discussions. Sure, I am not getting invited to the White House anytime soon, but as citizens of the country we are all friendly.” [...] “Wall Street is now going to have to figure out how to make this relationship work,” said Glenn Schorr, an analyst who follows the big banks for the investment bank Nomura. “It’s not impossible, but it’s not the starting point they had hoped for.” Morgan Stanley Reassures Its Bankers (WSJ) The New York bank said Monday that investment-banking chief Paul Taubman would leave the firm at year-end. Mr. Taubman was passed over for a new job overseeing both the trading and investment-banking operations, people involved in the process said. The position went to Colm Kelleher, who has overseen sales and trading. To calm nerves and soothe egos among the firms' bankers, Morgan Stanley gathered its new team of investment-banking leaders in New York this week. Mr. Kelleher and one of his new banking lieutenants, Franck Petitgas, traveled from their London office, and Mr. Petitgas spent much of the week meeting with managers in the investment-banking division and senior bankers, people familiar with the discussions said. Top executives reassured senior bankers Monday that the investment-banking business was a priority for Morgan Stanley. In a memo to employees, Chief Executive James Gorman said Morgan Stanley would "continue to build on our leadership position in investment banking and capital markets." The messages came as some rank-and-file bankers at Morgan Stanley privately expressed surprise and dismay at the news from Mr. Taubman, who announced his departure to colleagues in an emotional meeting Monday with Messrs. Kelleher and Gorman in attendance. Some Morgan Stanley bankers said they worried that the new chiefs of investment banking didn't have the stature of Mr. Taubman, who spent a significant amount of time as a mergers banker and was known internally for his staunch support of the firm's investment-banking franchise. "People are upset," one senior person inside the company said. Wall Street Trades Foiled Romney Dreams For Bowles Hopes (Bloomberg) Wall Street executives who lost a bet that Republican Mitt Romney would defeat President Barack Obama are bracing for tougher regulation and hoping a deal can be struck with Congress to cut the deficit. Obama’s choice to succeed Treasury Secretary Timothy F. Geithner will be watched closely for signs about the administration’s approach to business and the deficit, industry executives said. Erskine Bowles, who served as chief of staff under former President Bill Clinton, would be a sign that Obama is willing to endorse a bipartisan debt-reduction plan supported by many business leaders, they said. “With the appointment of the Treasury secretary, Obama will be sending an important message to the public and to the foreign governments who own a lot of Treasuries,” Curtis Arledge, chief executive officer of Bank of New York Mellon Corp.’s investment-management arm, which oversees $1.4 trillion, told journalists in New York yesterday. “If he goes with somebody like Erskine Bowles, then the message will be that he cares about the deficit and is serious about cutting it.” Focus Shifts To Fiscal Cliff (WSJ) Barry Knapp, head of U.S. equity portfolio strategy at Barclays, turned more bearish after seeing the election results, arguing that the risk of fiscal-cliff disaster increased to more than half, from about 30% before. "When I look at what happened, I see a government that grew farther apart, which might be worse than the status quo," Mr. Knapp said. "The risk of going off the cliff has just gotten huge." Jobless Claims Fall (WSJ) Initial jobless claims, which are a measure of layoffs, decreased by 8,000 to a seasonally adjusted 355,000 in the week ended Nov. 3, the Labor Department said Thursday. Economists surveyed by Dow Jones Newswires expected 365,000 new applications for jobless benefits. Greek Jobless Rate Hits New High (WSJ) Elstat, the Greek statistical agency, Thursday said the seasonally adjusted rate of unemployment increased to 25.4% from 24.8% in July and 18.4% in August 2011. That was just below the 25.5% unemployment rate recorded by Spain in the same month, the highest in the European Union. Herd of elephants go on drunken rampage after mammoth booze up (Metro) The trunk and disorderly mammals ransacked a shop, three houses and ruined crops in the eastern village of Dumurkota, India. Police say the gang of over-the-limit tuskers downed more than 500litres of moonshine alcohol, managing to drink the place dry in a matter of minutes. The unruly mob demolished dozens of houses in their desperate hunt for more booze after hoovering up the hard stuff in record time. Local police officer Asish Samanat said the drunken elephants were more 'aggressive' than usual after their mammoth drinking session. 'Unfortunately these animals live in close proximity to man and they recognised the smell of the drink,' he explained. 'They were like any other drunk - aggressive and unreasonable but much, much bigger.' ECB Stands Ready to Buy Bonds as Economy Weakens (Bloomberg) “We are ready to undertake” Outright Monetary Transactions, “which will help to avoid extreme scenarios,” Draghi said today at a press conference in Frankfurt after policy makers left the benchmark interest rate at a historic low of 0.75 percent. “The risks surrounding the economic outlook remain on the downside” and underlying inflation pressures “should remain moderate,” he said. SocGen CEO Blames ‘Stupid’ Accounting for Profit Drop (CNBC) “Exceptional items are related in particular to this stupid accounting thing which means that when you have a credit that is improving, your CDS is going down and you have to recognise negative revenues,” Frederic Oudea told CNBC in Paris. SocGen’s third-quarter net profit was 85 million euros, down by 86 percent on the same period in 2011, after losses on asset sales. That was lower than analysts’ mean estimate of 139.1 million euros. Blackstone Leads Hedge Funds Attracting Bond-Rally Bears (Bloomberg) Funds that bet on both gains and losses in credit attracted $12.6 billion of deposits in the three months ended Sept. 30, the most since the period ended Dec. 31, 2007, according to HFR. Blackstone Group LP raised $4.05 billion during the period for its debt unit, which includes so-called long-short funds. Panning Capital Management, which was founded by Kieran Goodwin this year, started such a fund on Nov. 1 with $500 million. Two-Tier Global Housing Market Could Lead to Bubble: Goldman (CNBC) In a report titled: “Just don’t look down some house markets are flying again” Goldman argues easy money policies by the world’s major central banks has had a ripple effect on countries which have avoided the worst of the global financial crisis, boosting their house prices. According to Goldman, there now exist housing “high-flyers” - countries that have experienced real house price increases and “low-lyers” - countries where the housing market downturn appears to be more protracted. “High flyers” include Germany, Finland, Norway, France, Switzerland and Israel as well as Canada and Australia. The “low lyers” include the U.S., and the euro zone periphery of Spain, Greece, Italy and Ireland- but also those places where prices fell in the post-crisis period but have since stabilized such as the U.K., Japan and Denmark. Judge throws Dallas attorney back in jail after his Design District office trashed, vandalized with obscene drawings (DN) Attorney Tom Corea was charged earlier this year with four felonies alleging he stole from his clients. He was arrested, posted bond and was released. Weeks later, he was evicted for not paying rent for his upscale office in the 2000 block of Farrington Street near Interstate 35E and Market Center Boulevard, according to testimony before state District Judge Mike Snipes. Corea was ordered out by Oct. 31. When the president of the real estate company that represents the building, Doug Molny, showed up the next day to check out the property, he found “complete destruction,” including “penis graffiti on every single wall throughout the building,” Molny said. Written next to some of the penises was the name Doug. Molny said it appeared someone took a sledgehammer to granite counters. Additionally, doors, light fixtures, cabinets and appliances were destroyed or removed.