Business Education

Opening Bell: 2.21.18

As Stock Jitters Recede, Focus Shifts to Surging Company Profits [Bloomberg]A stream of rosy profit reports has helped soothe the nerves of investors rattled by this month’s stock market plunge. U.S. companies are seeing the biggest growth spurt in quarterly earnings in six years, and the pace is set to accelerate.The question now is whether that momentum will fuel further stock gains. Here’s a Change: U.S. Borrowing Costs Among Highest in Developed World [WSJ]For the first time since 2000, U.S. 10-year yields, at 2.88%, are above those of Australia, at 2.84%, notes ADMISI, a brokerage unit of agricultural giant Archer Daniels Midland. At first glance, this makes sense. Benchmark yields have converged as the U.S. Federal Reserve has raised rates while the Reserve Bank of Australia has stoo...

Paul Singer Thinks Cryptos Are Bullshit And Everyone Is Stupid

He’s smiling cuz you’re so stupid. We’ve heard a lot of hot takes on cryptos from the old school bros of finance. But while Lloyd Blankfein is tickled with curiosity, Jamie Dimon is…’evolving(?)’ and Warren Buffett is just bullshitting to flirt with Katy Perry, we all wondered what one legendary scrooge in particular had to say about the market that everyone pretends to understand.And now we have it… In a creative January missive that is equal parts critical about the hyperbole associated with cryptocurrencies and admiring of the manner in which they have captivated public imagination, Elliott Management described cryptocurrencies as “one of the most brilliant scams in history.” Paul SInger hates cryptos, y’all. He even made up an acronym to convey his disgust with people dumb enough to bu...

SEC Can’t Do Much About Crypto-Shenanigans But It Can Read Press Releases Promising Blockchain From Penny-Stock Companies

(Getty Images) Cryptocurrencies may be the secret to a utopian and blissful future. But until that day comes to pass, lots of bad things can happen with bitcoin and bitcoin-like things: Lots and lots of money can be lost. Small-scale frauds can be perpetrated. Sloppy companies can double-charge you for things. The Venezuelans can get involved. Oh yea, and if you dabble in them, you might find yourself surrounded by men with guns, especially if you happen to be in Russia or Phuket or anywhere else really. Virtual currencies can be easily transferred to an anonymous address set up by a criminal. While banks can stop or reverse large electronic transactions made under duress, there is no Bitcoin bank to halt or take back a transfer, making the chances of a successful armed holdup frighteningl...

‘Savor The Moment’ Because February’s Selloff Was ‘An Appetizer, Not The Main Course’

First thing on Tuesday morning (and remember, Tuesday is actually Monday for U.S. traders), we suggested that the mood was dour. I mean look, the mood is guaranteed to be some semblance of dour after a long weekend in the U.S. Americans aren’t a forward-looking bunch. They don’t think about Sunday in terms of “tomorrow is Monday” or, in the case of this week, they don’t think in terms of “Monday is a holiday but Tuesday is not.” Americans think of Sunday like a fun sequel to Saturday – so, more drinking, more laziness, and pretending like work isn’t right around the corner. So even if futures were green and yields were lower and there wasn’t every reason to believe that we’re going to have to worry about 3% on 10s all week amid the Treasury supply deluge and what should be Fed minutes tipp...

Jay-net Yellen Powell Hires Janet Yellen’s Former Adviser

During the campaign, Donald Trump warned that Janet Yellen’s monetary policy meant that bad things would happen under the next president, which would be him. He was right that bad things would happen—lots and lots of them have—although the causality is less than clear. This might have led you to think that, when he had the chance, he’d go with the anti-Yellen to lead the world’s most important central bank. Someone who’d really shake things up and Make the Fed Great Again. Of course, if you believed that, President Trump has a college degree he’d like to sell you. Because when the time came to pick a replacement for Janet Yellen, Trump essentially went with Janet Yellen with a penis, a fact that said Janet-Yellen-with-a-penis, Jay Powell, continues to confirm. Jon Faust, a professor of eco...

Guy Who Left Deutsche Bank To Write Post-Apocalyptic Fiction Clearly Adhering To “Write What You Know” Mantra

Sometimes there is elegant poetry hiding in a straightforward statement of fact: Chris Babu, who ran government-backed mortgage-bond trading at Deutsche Bank AG until 2016, has gotten used to funny looks when people hear about his career change.He now spends his time holed up with Buddy, his Great Dane, writing post-apocalyptic fiction for young adults from his home in Southampton, New York. It turns out that there is a second act for some survivors of Deutsche Banking, and this Chris Babu fellow seems to be a great example of a dude who had the perfect resume… He graduated from the Massachusetts Institute of Technology with a degree in mathematics, and worked at Bank of America Corp. before landing at Deutsche Bank in 2005, eventually rising to oversee 35 mortgage-bond traders and an $18 ...

The Trump Trade Deficit Is A Grower AND A Show-er

(Getty Images) Donald Trump has, for thirty years, characterized the U.S. trade deficit as an economic scorecard—arguing that the American habit of annually importing more than it exports is like running a business that loses money every year. This is, of course, utter nonsense. A national economy is nothing like a business, and the U.S. trade deficit, when compared to the nation’s trillions upon trillions in national wealth is a mere rounding error that is affected by far more than just U.S. economic policy. (It’s perhaps terrible analogies like these that led Trump economic advisor Gary Cohn to tell Michael Wolff that the president is “dumb as shit”) This isn’t to say that the trade deficit is of no consequence—more balanced trade could mean more domestic jobs, but then again, with unemp...

Venezuela’s Coke-Dealin’ VP Celebrates Launch Of Cryptocurrency, Says ‘Watch Out’ World!

Back in November, I introduced anyone who might not know any (alleged) blow kingpins to OFAC-designated drug trafficker Tareck El Aissami. According to the U.S. Treasury, El Aissami is, much like Ron Burgundy, “kind of a big deal.” Specifically, the sanctions action taken against him last year contains the following highly amusing account of his various activities and connections: He facilitated shipments of narcotics from Venezuela, to include control over planes that leave from a Venezuelan air base, as well as control of drug routes through the ports in Venezuela. In his previous positions, he oversaw or partially owned narcotics shipments of over 1,000 kilograms from Venezuela on multiple occasions, including those with the final destinations of Mexico and the United States. He also fa...

Jeff Bezos, Who Is Not A Super-Villain, Is Building A Giant Clock Inside A Mountain, Because He’s NOT A Super-Villain

So sure, Jeff Bezos has made himself the wealthiest person in the world by building a massive company designed to enter users’ everyday lives and then use that market share to systematically disrupt and destroy whole industries. And yeah, he’s created a cloud data storage behemoth that now holds an unfathomable amount of digital personal information, purchased a major national newspaper, opened a movie studio, built his own space rockets and transformed his body into a bald, shredded killing machine. But he’s not a comic book super-villain come alive, you guys, that’s a crazy suggestion! To be an actual real-life super villain, he’d have to go do some bizarre mega-project in some remote part of the world and pretend that he wasn’t building his new super-secret lair… Installation has begun—...

Opening Bell: 2.20.18

Dow futures drop 200 points as rates rise; Walmart falls after earnings [CNBC]At around 6:50 a.m. ET, Dow futures were down 200 points, indicating a fall of 173 points at the open. Dow futures were also pressured by a 2.2 percent premarket decline in Walmart shares. The Nasdaq and S&P 500 futures also pointed to a negative open for their respective markets.The benchmark 10-year note yield rose to 2.908 percent, after hitting its highest level since 2014 last week. The short-term two-year note yield, meanwhile, traded around a nine-year high. EU warns it will retaliate if hit by U.S. trade curbs [Reuters]“We have made it clear to the U.S. administration at the highest level that we would be deeply concerned about measures that affect the EU industry,” Commission spokesman Margaritis Sch...

Mike Corbat’s Bosses Finally Think He’s As Good As Brian Moynihan

When Mike Corbat because CEO of Citigroup back in 2012, he had a dream, a dream that one day his bank would “get to a point where we stop destroying our shareholders’ capital.” A dream that one day he’d be able to do that through means other than firing everybody. A dream that Citi wouldn’t always fail all the stress tests. A dream that one day, his emerging markets business would receive the high praise of “no deficiencies.” That dream has more or less come true, in spite (or perhaps because) of Citi’s worst-ever quarter. But there was an unspoken part of the dream: That one day Mike Corbat would no longer be less valued than Brian Moynihan. That one day he’d be able to look his peers in the face and when Lloyd Blankfein reached for the check with pity and said, “Don’t worry, Mike. We’ve ...

Michelle Caruso-Cabrera Has Had Just About Enough Of Riot Blockchain

Remember Riot Blockchain? Riot is, in many ways, the poster child for the absurd digital gold rush that accompanied Bitcoin’s meteoric rise to $20,000 late last year. I profiled it at length back in October. Here is a brief retelling of Riot’s corporate history as originally expounded in a December post: And lest you should forget about the original poster child for this mania, Riot Blockchain, they announced a secondaryon December 18, issuing 1.64 million restricted units at a purchase price of $22.50 each. Don’t let the history here be lost on you. This is a company which, just five years ago, was licensing “intellectual property relating to recombinant single chain reproductive hormone technology for use in non-human mammals,” and which, just 21 months ago, sold its headquarters only to...