Financial Markets and Economy
Death Cross Forms in Dow Industrials Down 5% Since Record High (Bloomberg)
The Dow Jones Industrial Averages biggest decline in a month is proving the final nail in its death cross.
Google buys time for bold bets with new Alphabet structure (Business Insider)
By separating moonshots from moneymakers, Google founders Larry Page and Sergey Brin are now free to pursue more quixotic business ideas such as glucose-monitoring contact lenses, Internet-connected, high-altitude balloons and even immortality.
Investors cheered the corporate restructuring announced Monday for giving greater visibility into Google's central business and seemed less anxious about zany ventures that may pose as distractions.
Foreign banks have $1 trillion parked at the Fed (Market Watch)
Large banks and subsidiaries of foreign banks are in line to get higher interest payments when the Fed raises interest rates.
Verizon wants to make the Internet 1,000 times faster (CNN)
Verizon is working on new broadband technology that is capable of delivering some of the fastest Internet speeds ever recorded.
The new service would provide customers download speeds of 10 gigabits per second. That would be 10 times faster than Google Fiber and 1,000 times faster than the average U.S. home Internet connection.
Currency Rout Goes Global as Jen Sees Risk of 50% Loss on China (Bloomberg)
As bad as things are for emerging-market currencies, China is about to make them a whole lot worse.
If oil goes to $40 a barrel something is 'very, very wrong with the world' (Business Insider)
West Texas Intermediate crude oil is at a 6-year low of $43 a barrel.
And back in December 2014, "Bond King" Jeff Gundlach had a serious warning for the world if oil prices got to $40 a barrel.
"I hope it does not go to $40," Gundlach said in a presentation, "because then something is very, very wrong with the world, not just the economy. The geopolitical consequences could be — to put it bluntly — terrifying."
Saudi Arabia issues bonds worth $5 billion (Market Watch)
Saudi Arabia has issued bonds worth 20 billion riyals ($5.33 billion), and plans to raise billions more to maintain its spending plans, as the world’s top oil exporter grapples with lower revenues amid a dramatic drop in energy prices.
The bonds were sold to local banks and institutions in three tranches of five-, seven- and 10-year maturities, the official Saudi Press Agency, or SPA, said Tuesday, citing the Saudi finance ministry. Saudi Arabia issued development bonds worth 15 billion riyals in June as well, its first sovereign issuance since 2007. More multibillion debt sales could follow in the coming months, the SPA said.
This stock is up more than 1,000% in the past 3 days (CNN)
You've probably never heard of Aquinox Pharmaceuticals, a tiny biotech based in Vancouver.
But the stock is the new favorite plaything of day traders. They've been batting it around back and forth like a bunch of kittens with a ball of yarn.
Here's One Big Winner From the Collapse in Oil Prices: Tire Manufacturers (Bloomberg)
Few industrial companies will celebrate the collapse in oil prices to below $50 a barrel more than the world’s largest tire manufacturers.
A trader in Pennsylvania allegedly made millions in a huge insider trading scandal (Business Insider)
More than 30 defendants were today named in criminal and civil cases over alleged hacking and insider trading.
Only one appears to have a background on Wall Street — Vitaly Korchevsky.
The 49-year old Russian immigrant was arrested in Pennsylvania today in connection with a global cyber crime and insider trading ring that allegedly netted over $100 million.
Credit Suisse nearing record settlement over dark pool (Market Watch)
Credit Suisse Group AG is in talks with regulators to settle allegations of wrongdoing at its “dark pool” with a record fine in the high tens of millions of dollars, according to people familiar with the matter.
The Swiss bank is negotiating a joint settlement with the New York Attorney General and the Securities and Exchange Commission. A deal could come as soon as the next several weeks, though talks could still fall apart, the people said.
Pigs Using Muscle Drug Means U.S. Missing China Pork-Import Boom (Bloomberg)
Hog farmers in the U.S., the worlds biggest exporter, are losing out on a big payday because of a feed ingredient that many have been giving pigs for the past 15 years.
Tech Breakups Show Bigger Is Not Necessarily Better (NY Times)
Symantec is revealing the truth about tech mergers and acquisitions. Offloading its data storage and recovery business Veritas for $8 billion to the buyout firm Carlyle and GIC of Singapore ends a decade-long disaster of a deal. Like Hewlett-Packard, Microsoft and others, Symantec discovered that it can be harder to buy than to build. The resulting carve-ups and write-downs, though, have a tendency to perpetuate the problem.
S&P to Warren Buffett: We're watching you (Business Insider)
Ratings agency Standard & Poor's is watching Warren Buffett's Berkshire Hathaway.
In a statement on Tuesday, S&P said that it is placing Berkshire on CreditWatch Negative following its acquisition of Precision Castparts.
In its release, S&P said this move, "reflects uncertainty around the funding of the acquisition and how it may affect current cash resources and leverage metrics at the holding-company level. In addition, we believe that to fund the acquisition, BRK is likely to use some of the capital resources available at its insurance companies."
Pinterest, Snapchat and other startups may be swallowed up by a bigger rival (Market Watch)
Pinterest, Shazam, Evernote and Snapchat are unlikely to survive on their own and are more likely to be swallowed up by a much bigger competitor.
That’s the view of Victor Basta, managing partner of M&A advisory firm Magister Advisors, on the companies, all of which have valuations of more than a billion dollars, putting them in the so-called Unicorn Club of startups. Basta said in a note that the four define a new “Icarus ‘junk debt category of their own,” as they suffer from a lack of a sustainable platform and competition from tech giants such as Google Inc. and Facebook Inc. FB, -0.56%.
Einhorns Greenlight May Get Boost From China Devaluation (Bloomberg)
With U.S. equities declining in the wake of China’s currency devaluation, hedge fund manager David Einhorn may be one of the few stock pickers to get a direct boost from the yuan’s sudden decline.
Greenlight Capital Re Ltd., an insurer Einhorn controls, was positioned at the end of June to reap a $30.4 million gain, equaling 2.2 percent of its investment assets, if the dollar rose 10 percent against the yuan, according to company filings. Einhorn’s hedge funds have a similar short position against the yuan, said a person familiar with the matter who requested anonymity because the firm is private.
Oil at 6-year low, but OPEC keeps pumping more (CNN)
OPEC said Tuesday that its output surged to a three-year high in July. The cartel produced 31.5 million barrels a day, more than 1.5 million barrels above the ceiling it agreed to just a month earlier.
China is about to absolutely hammer some of the weakest economies in the world (Business Insider)
It's going to go from bad to worse for commodity producing economies.
Now that China has devalued its currency, the yuan, the commodity producing countries that sell their raw materials to China — the biggest consumer of commodities in the world — will also start to feel pressure on their economies.
Productivity dry spell looks worse in latest report (Market Watch)
The dry spell of productivity in this economic expansion is even worse than previously thought, according to new data released Tuesday.
The average annual rate of productivity growth from 2007 to 2014 was revised down to 1.3% per year from the prior estimate of 1.4%, the Labor Department said Tuesday.
Emerging Stocks Sink 20% From September Peak, Enter Bear Market (Bloomberg)
Emerging-market stocks entered a bear market and currencies slid on concern China will curtail imports after the biggest slide in the yuan in two decades.
The selloff took the MSCI Emerging Markets Index’s decline from a peak last September to 20 percent, the threshold for a bear market.
Gold Bullion Holds Its Own As Media Stocks Collapse (Gold Core)
Gold is holding its own but that hasn’t stopped many gold bears from using this as an opportunity to disparage the yellow metal.
Traders have 2 questions about China's stunning currency devaluation (Business Insider)
The big news on Tuesday is China's move to devalue the yuan overnight.
It's a modest move, all things considered, but it's revealing with regard to how the Chinese government sees the economic situation in China.
Namely, by shifting the midpoint of its peg against the US dollar, China appears to be admitting that it must take measures to stabilize its flagging economy.
Four Charts That Will Help You Figure Out Where the Yuan Is Going (Bloomberg)
We are still scratching our heads trying to figure out why the devaluation happened and why, in particular, right now. … We should be watching for an attack on the yuan, however, at least until the PBOC proves that it can resist speculative pressure. — Carl B. Weinberg, High Frequency Economics
How Much More Faith In Central Banks Is Left? (Zero Hedge)
Carry traders just got their fingers burnt by central bankers, again.
Politics
Law professor wants to be president — and it’s not Obama (Market Watch)
This may sound familiar: A professor of constitutional law wants to become president.
It’s not Barack Obama seeking a third term (though the current Oval Office occupant has mused he could win if he were permitted to run); it’s Harvard Law School professor Larry Lessig who’s eyeing the job. Lessig has filed paperwork to form an exploratory committee to seek the Democratic nomination for president, on a platform of getting rid of political corruption.
US military official: 'We were outraged' when Turkey pulled a fast one right after the anti-ISIS deal (Business Insider)
An American military source told Fox News that US military leaders were "outraged" when Turkey began launching airstrikes against the Kurdish PKK in northern Iraq just hours after striking a deal with the US opposing the Islamic State, the militant group also known as ISIS, ISIL, or Daesh.
A Turkish officer entered the allied headquarters in the air war against ISIS and "announced that the strike would begin in 10 minutes and he needed all allied jets flying above Iraq to move south of Mosul immediately," the source said.
How to Impeach a Brazilian President: A Step-by-Step Guide (Bloomberg)
Brazilian lawmakers are split whether to support impeachment proceedings against President Dilma Rousseff over allegations that range from doctoring last year’s fiscal accounts to being negligent while chairman of Petrobras.
Right now, there are 10 such requests pending, according to the lower house of Congress. Impeachment proceedings only start if the house accepts what it considers to be a legitimate petition and puts it to a vote.
Technology
The robot revolution is coming for Wall Street traders (Business Insider)
Technology is taking over Wall Street, and it means investment banking jobs of the future will look very different than they do today.
Traders are obviously no strangers to the growing use of tech. At most exchanges trading floors have been replaced by servers, and plenty of hedge funds rely on computer programs to make buy and sell decisions.
Robots learn to evolve and improve (BBC)
Engineers have developed a robotic system that can evolve and improve its performance.
A robot arm builds "babies" that get progressively better at moving without any human intervention.
The ultimate aim of the research project is to develop robots that adapt to their surroundings.
Health and Life Sciences
Trans fats significantly increase the risk of heart attack and death (The Verge)
Since the 1970s, people have been given dietary advice about avoiding fats — and it’s wrong, a new analysis published in the British Medical Journal suggests.
Specifically, the meta-analysis found that the fats in cheese and meats — called saturated fats — aren't linked to type 2 diabetes, stroke, heart disease, or an increased risk of early death. However, a diet high in trans fats — the kind of fat that's often added into packaged snack foods or found in margarine — can significantly increase a person's risk for heart disease and early death.
A New Drug Erases Memories to Treat Addiction (Gizmodo)
Methamphetamine is one of the nastiest drug addictions to overcome, in part because memories of the high are so powerful. But what if scientists could erase those drug-infused recollections? Researchers at the University of Florida have developed a drug that’s able to do just that in mice.
The mechanism behind the memory-erasing drug draws on earlier research unraveling how memories form. Turns out, the process our brains use to build a memory during meth use is pretty abnormal (shocker, I know). The researchers figured out how to exploit this difference to create a drug that only targets psychostimulant-induced memories.
Life on the Home Planet
Why LA Began Throwing Shade Balls In Water Reservoirs (Popular Science)
If you make a mess, just cover it up. That's the theory behind the Department of Water and Power's latest project in Los Angeles, which aims to prevent the formation of a carcinogen in two drinking-water sources, the Ivanhoe [pictured] and Elysian reservoirs.
The unwanted chemical, bromate, forms when sunlight, chlorine and the naturally occurring mineral bromide intermingle. The city considered solutions, like a tarp or metal cover, but they were all too costly, labor-intensive or ugly. Then the ball idea, courtesy of LADWP biologist Brian White, floated to the top. The layer of three million black polyethylene balls prevents sunlight from completing the deadly cocktail. If it seems a bit temporary, it is—officials plan to retire the balls in five years, when a replacement underground reservoir near Griffith Park is finished.
