There’s
a Lot More at Stake in this IPO than Just Toxic Financials - (www.wolfstreet.com) Snap Inc., the parent company of SnapChat,
filed for an IPO on Thursday. The filing revealed just how toxic this deal is going
to be, not just from a financial point of view – a risk IPO investors are
willing to take in order to grab the next Google or Facebook – but from a
corporate governance and shareholder-rights point of view. This has
implications far beyond Snap: If Snap’s current owners can pull it off and get
away with it, other companies will start doing the same thing, and it will
forever change what it means to be a screwed stockholder.
Hedge
Fund Investor Letters Show Managers Are Stumped by Trump - (www.bloomberg.com) The
masters of the universe are sharpening their pencils to write about Donald
Trump. The problem? Many of them aren’t sure what to say. In commentaries such
as quarterly letters to clients, money managers tackling the potential impact
of the new president are sometimes bullish -- and almost always hedged. They’re
going to do great, they say, but it’ll be a tough time for hedge funds
generally. Here are some excerpts from the commentary we’ve read.
Markets
Smell a Rat as Central Banks Dither - (www.wolfstreet.com) Markets
are suspecting that central banks are in the process of exiting this fabulous
multi-year party quietly, and that on the way out they won’t refill the booze
and dope, leaving the besotted revelers to their own devices. That thought
isn’t sitting very well with these revelers. In markets where central banks
have pushed government bond prices into
the stratosphere and yields, even 10-year yields, below zero, there has been a
sea change. The 10-year yield of the Japanese Government Bond (JGB) jumped 2.5
basis points to 0.115% on Thursday, the highest since January 2016, after an
auction for ¥2.4 trillion of 10-year JGBs flopped, as investors were losing
interest in this paper at this yield, and as the Bank of Japan, rather than
gobbling up every JGB in sight to help the auction along, sat on its hands and
let it happen.
Deutsche
Bank to Cut Equities and Fixed Income Trading Staff - (www.bloomberg.com) Deutsche
Bank AG is about to eliminate staff at its trading business, according to a
person familiar with the matter, a day after reporting results for the unit
that missed analysts’ expectations. The bank will cut as much as 17 percent of
staff globally in its equities unit and reduce fixed-income headcount by
as much as 6 percent, with notices to be served to employees soon, the person
said. Chief Executive Officer John Cryan is eliminating 9,000 jobs across the
company to raise profitability and capital levels eroded by misconduct costs.
Deutsche Bank’s market share in fourth-quarter trading fell to the lowest since
the financial crisis as Cryan cut assets and clients concerned about the
company’s finances pulled back.
European
Bonds Post Worst January on Record Amid Political Angst - (www.bloomberg.com) Euro-region
bonds handed investors the worst start to a year on record as heightened
political risk across the currency bloc added to speculation the European
Central Bank may bring its asset-purchase program to an abrupt halt in 2018. With
general elections scheduled in France, Germany and the Netherlands this year
amid an increase in support for anti-euro rhetoric, yields on French
and Italian bonds climbed this week to their highest level relative to
benchmark German debt since 2014. In the face of stronger growth and
rising inflation, some investors aren’t listening to Mario Draghi when he says
the ECB hasn’t considered tapering its bond-buying plan.
No
Fireworks for Chinese Stocks After Week-Long Break - (www.bloomberg.com)
Donald Trump Plans to Undo Dodd-Frank Law, Fiduciary Rule - (www.wsj.com)
China Tightens Monetary Policy by Raising Repo Rates - (www.wsj.com)
Donald Trump Plans to Undo Dodd-Frank Law, Fiduciary Rule - (www.wsj.com)
China Tightens Monetary Policy by Raising Repo Rates - (www.wsj.com)
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