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Finance Minister Berat Albayrak assured international investors on Thursday that Turkey would emerge stronger from its currency crisis, insisting its banks were healthy and signaling it could ride out a dispute with the United States.


Turkey does not wish to have problems with the United States and the two NATO allies could easily overcome their differences but not with the current U.S. approach, Foreign Minister Mevlut Cavusoglu said on Thursday.


Air France-KLM named Air Canada executive Benjamin Smith as its new boss on Thursday, opting for an outsider to steer the airline group through a fraught stand-off with unions at its French carrier.


U.S. stocks bounced back on Thursday, with the Dow setting a course for its best day in over four months, as a series of positive earnings and waning trade jitters girded investor confidence.


U.S. Trade Representative Robert Lighthizer on Thursday expressed hope a breakthrough could be made in the coming days in efforts to rework the NAFTA trade deal, though his Mexican counterpart said flexibility was needed to reach agreement.


starbucks barista

  • Crypto took off at the end of 2017, with bitcoin hitting $20,000 at the end of December. 
  • In this oped, Bruce Elliott, president of ICOx Innovations, argues that big brands are just entering the space. This is what's going to take the nascent market to the next level, not small ICO projects. 

If you would have asked me in January – when we helped Kodak launch KodakOne and KodackCoin – if both Starbucks and Facebook would let the world know this year that they have their eyes on cryptocurrency, I would’ve said, “Not likely.”

But here we are, six months later, and Facebook has reportedly engaged in conversations with blockchain projects including Stellar and is expanding its team focused on the much-hyped technology. And Starbucks recently announced a partnership with Bakkt, a new Intercontinental Exchange company whose mission is to create “an open and regulated global ecosystem for digital assets.”

So while we’re not quite there with mainstream adoption of cryptocurrency, Facebook’s and Starbucks’ leadership into the space is a milestone. We will see more household names exploring and entering cryptocurrency, looking for new models of customer engagement leveraging their brand equity in powerful new ways.

Now some of these big-brand cryptocurrency plays have been nothing more than publicity stunts – like the tartly cynical Long Island Iced Tea-Long Blockchain stunt that now has the Security and Exchange Commission’s attention. But there is a growing cadre of the legacy brands we all recognize that are figuring out how to angle their way into cryptocurrency and blockchain.

Why? They recognize that brands are exactly what’s missing from the exploding space. That’s the “Why.” How about the “Why now?”

Two reasons: bigger brands are almost always slower in adopting new technology, both because they tend to be risk averse and also because they naturally move slower. But also the cryptocurrency roller coaster has reached a point at which big brands are starting to recognize a mutually beneficial path forward. Many crypto projects will soon need access to larger audiences for wide adoption, and big brands, staring eroding brand loyalty or existential scandal the face, have the chance to hook themselves on to the new-tech media darling.

Returning to the KodakOne example, we helped this time-tested brand announce a blockchain platform and cryptocurrency when there were 10 other image-rights management ICOs going on. But the legacy brand won out – at least in terms of attention, as a simple news audit of the past 12 months affirms. KodakOne is taking the ball and running with it.

Soon, user-generated photos taken in six major U.S. stadiums will be instantly loaded to the KodakOne blockchain, with the prospect of the photographers getting paid instantly (in KodakCoins) for usage. But the even more drool-worthy part of this integration is that these same sports fans will be able use KodakCoins to buy in- stadium soda, chips, hot dogs, beer and merchandise. As it’s estimated that 55 million Americans will use its mobile app to pay for their coffee before the end of this year. Couple that large of a community with a brand of its strength, and Starbucks has the potential to go beyond its existing business model, creating a new economy model for engagement.

When looking at Facebook, crypto inside the social network could create, for instance, a highly efficient global peer-to-peer payments model similar to that proposed by the largest ICO ever, Telegram, or Asian competitor WeChat Pay.

It could also be used as part of a new-style loyalty program, or even as the basis for an adjacent economy – for example, the subscription economy or authentic verified-news economy. Bear in mind this is all happening amidst some pretty drastic changes we’re seeing in the young ICO market. To separate themselves from the many scams, legitimate companies are doing the hard work up front – capital raising, platform development, early customer adoption – and then going to the public for an ICO raise.

With the components of a true economy already in place, these tokens circulate according to traditional supply-and-demand models. I understand that big brands entering cryptocurrency may sound like anathema to some crypto enthusiasts. But I would also think these skeptics would rather let market forces than their own biases determine how cryptocurrency can best be applied in our great, big world. After all, big brands won’t be able to just slide into cryptocurrency without working for it.

Many will be romanced by the prospects of non-dilutive financing, speed of outsourced innovation and riding the hype wave, but only the clever brands who understand their power to connect communities will emerge winners. Like startups, many ICOs will struggle to achieve critical mass in customer adoption – and will, therefore, fail. The crypto economies that are powered by well designed cryptocurrencies and token economic models (like the Image Economy for KodakOne) leverage both the power of brands and the power of blockchain. Will that also be Starbucks and Facebook? Ask me in six months.

Bruce Elliott is president of ICOx Innovations, which helps established organizations grow their businesses through the use of blockchain technology and cryptocurrencies. He is a 25-year e-commerce veteran who has held senior leadership roles in privately held and listed companies in online payments, gaming, venture capital, and trust and corporate service sectors in North America and Europe.

SEE ALSO: NYSE owners' plan for a new crypto ecosystem has one detail that traders have been crying for —and it might reel in Wall Street

SEE ALSO: Facebook has talked to crypto project Stellar about its blockchain efforts — and it hints at how the social-media giant could take on Wall Street

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Google's plan to launch a censored search engine in China requires more "transparency, oversight and accountability," hundreds of employees at the Alphabet Inc unit said in an internal petition seen by Reuters on Thursday.


America's two biggest independent seed sellers, Beck's Hybrids and Stine Seed, told Reuters they are pushing U.S. environmental regulators to bar farmers from spraying dicamba weed killer during upcoming summers in a potential blow to Bayer AG's Monsanto Co.


Currency rallies after Turkey promises cuts but investors’ questions remain 


symantec cyberwar games

  • Shares of Symantec jumped as much as 10% to $20.50 Thursday after Starboard reported a stake in the cybersecurity giant.
  • Starboard, which manages roughly $6 billion, has taken a 5.8% stake in Symantec and nominated five directors to the board.
  • The stock surge recovers some of the price loss after Symantec fell sharply after bad earnings earlier this month.
  • Follow Symantec's stock price in real-time here.

Shares of Symantec surged as much as 10% to $20.50 Thursday on trading after Starboard, a $6 billion New York-based investment adviser, reported a beneficial ownership in the cybersecurity giant in a 13D filing.

Starboard has taken a 5.8% stake in Symantec and is seeking five board seats at the cyber-security company, the Wall Street Journal reported on ThursdayThe slate of five directors includes Dale Fuller, a former chairman of antivirus company AVG Technologies, and former Intuit executive Nora Denzel. It also includes three people Symantec previously put on the board of Marvell Technology — a semiconductor company it's trying to restructure.

The nominees could help improve operations and amend issues with financial reporting, according to the WSJ report.

The stock increase recovers some of the loss incurred when Symantec fell as much as 15% in a single day after bad earnings earlier this month. The drop came after the cybersecurity software maker announced an 8% labor cut and gave a disappointing forecast for quarterly profit and revenue.

Shares of Symantec are down 30% since the beginning of the year.

symantec

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The board of Air France-KLM named Air Canada executive Benjamin Smith as its new chief executive on Thursday, opting for an outsider to try and steer the group through a fraught stand-off with unions at its French carrier.


Lanxess Chief Executive Matthias Zachert is not available to become CEO of Thyssenkrupp , a source familiar with the matter said, ending speculation that he could replace interim CEO Guido Kerkhoff.


S&P 500 back in sight of record high; Turkish lira extends recovery


China and the United States will hold lower-level trade talks this month, the two governments said on Thursday, offering hope that they might resolve an escalating tariff war that threatens to engulf all trade between the world's two largest economies. .


Walmart streaming service

  • Walmart is surging after crushing earnings estimates Thursday morning, adding about $12 billion to the wealth of the Walton family.
  • An investment of $1,000 at the start of 1980 would be worth over $1.9 million today.
  • Watch Walmart stock trade in real time here.

Walmart's stock price is surging after the company announced better-than-expected earnings results Thursday morning. As a result, the Walton family — the descendants of the retail mega-giant's founder — gained about $12 billion in wealth Thursday morning.

And an investor in the company decades ago would have made a very nice return on that bet.

According to Yahoo Finance, Walmart's split- and dividend-adjusted closing stock price on January 2, 1980 was a little over $0.05. As of 1:15 PM ET Thursday, Walmart was trading just shy of $99 per share, up nearly 10% on the day.

The chart below shows the value over time of a $1,000 investment made in Walmart at the start of 1980. As of Thursday afternoon, that investment would be worth over $1.9 million:

walmart invest back in the day 

SEE ALSO: Here's how much you would have made investing $1,000 in Facebook, Amazon, Netflix and 19 other major companies back in the day

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White House counsel Don McGahn called the head of Federal Communications Commission in July to ask about the status of Sinclair Broadcast Group Inc’s now abandoned $3.9 billion acquisition of Tribune Media Co .


Walton family members (L to R) Jim, Rob and Alice Walton speak onstage at the Wal-Mart annual meeting in Fayetteville, Arkansas, June 5, 2015. REUTERS/Rick Wilking


Walmart skyrocketed more than 10% Thursday following the grocer's earnings report that crushed analysts expectations, adding a cool $11.6 billion to the founding family's wealth.

The richest family in the United States — which owns about 48% of the US' largest grocery chain through Walton Enterprises — saw their net worth surge to $163.2 billion, Bloomberg first reported.

On an individual basis, Jim Rob and Alice Walton — the heirs of Walmart's co-founder Sam Walton — are worth between $42.1 billion and $43.8 billion, according to Bloomberg's Billionaires Index. Lukas, Sam Walton's grandson, is worth $15.3 billion. Two other family members, Christy Walton and Nancy Walton Laurie, are worth $6.89 billion and $4.66 billion, respectively.

Unsurprisingly, much of the family's wealth is tied up in Walmart, which has had a volatile start to the year. Tuesday's gains, fueled by growth in both traditional groceries as well as e-commerce, bring the stock back near its January highs of $109. While none of the heirs are actively involved in Walmart's day to day operations, they retain an outsized-presence on the company's board.

Shares of Walmart are up about 1% since the beginning of the year.

Now read: 

Walmart stock price earnings

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nasdaq times square

  • MSCI and S&P are soon to make some changes to how tech companies are categorized on the S&P 500 for the first time since 1999.   
  • On September 28, a new Communication Services sector will replace the current Telecoms sector, and will include some of the biggest stocks including Facebook and Netflix.
  • It's only the second sector addition since 1999, and is a recognition of how consolidation has melded the telecom, media, and internet industries together.  
  • Exchange-traded funds that track S&P 500 sectors will be most affected by the reclassification, and some big providers are already making changes ahead of the implementation. 

Some big changes are coming to the US stock market.

On September 28, S&P Dow Jones Indices and GICS will create a new sector for tech, media, and telecoms companies, and it's a change that will affect many of the the biggest and most popular stocks on the market. 

Here's what you need to know. 

What is happening? 

S&P and MSCI are ditching the existing Telecoms sector and creating a new Communications Services sector. This new sector will include companies that provide platforms for communication, of course, and those that operate various kinds of media.

It will also fold in companies in the Consumer Discretionary Sector that are currently classified in the Media and Internet & Direct Marketing Retail sub-industries, and some companies in the existing Information Technology sector.

Communications Services will be the largest sector of the S&P 500 with about a 10% weighting, according to Wells Fargo. 

Here's a detailed map of all the changes: 

Screen Shot 2018 07 30 at 11.34.49 AM (1)

Why does it matter? 

Apple is currently housed in the Technology sector, and in the Communications Equipment industry. These categories are determined by the Global Industry Classification Standard, or GICS, which is maintained by MSCI and S&P.

These boxes make sense for Apple, considering that the world's most valuable company still makes most of its money by selling iPhones. But over time, these categories have become more fluid for other tech companies. Is Verizon, with its recently acquired media arm Oath, really just a telecoms company? Is Facebook, now one of the world's largest distributors of news, a social network or a media company or both?

The new sector aims to address these questions. 

The GICS is keeping up with how much evolution has taken place in tech. Facebook didn't even exist at the height of the tech bubble in 1999, the same year that MSCI and S&P first implemented the GICS.

And so, the GICS reclassification is a reminder of sorts to markets about what these companies really do, and it aims to reflect where companies earn most of their revenues from.

"The lines among media, communications, and content are blurred," David Blitzer, chairman of the index committee at S&P Dow Jones Indices, said. "It is time to acknowledge this convergence and the overlapping services these companies provide."

The most recent precedent for this kind of GICS reclassification also provides insight into why the 'right' sector grouping matters. 

In September 2016, S&P and MSCI removed real estate companies and some real estate investment trusts (REITS) from Financials to create a new sector.  

Real Estate, from its breakout as a sector through August 15, 2018, returned almost nothing — 0.5% — versus a 39% rally for Financials. This performance gap suggests investors focused on very different fundamentals for these once-unified sectors. 

Which stocks are going to be affected? 

The change is going to affect some of the biggest and most popular tech companies, including Facebook and Alphabet. Both will move from the old tech sector to the new communication services group. Also, their sub-industry will change from one called internet software & services to interactive media & services. 

Netflix, another one of the so-called FANG stocks, is also getting reshuffled. It's going from the consumer discretionary sector, where it lives with companies like McDonald's and Ralph Lauren, to the new communication group. Disney and 21st Century Fox are making the same industry move.

"DVD rentals" is not the only thing that comes to mind when Netflix is mentioned these days. Big spending on original content and licenses is a key part of its business. So Netflix's sub-industry will change from Internet & Direct Marketing Retail to the more appropriate Movies & Entertainment category. 

MSCI plans to release a final list of all the stocks affected before flipping the switches on September 28. 

What does this mean for the stock market?

Exchange-traded funds designed to track specific industries will be affected.

Vanguard, the $5.1 trillion investor that essentially invented the equity index fund, announced in March that it was temporarily creating custom benchmarks for the Vanguard Consumer Discretionary Index Fund, the Vanguard Information Technology Index Fund, and the Vanguard Telecommunication Services Index Fund. 

"These changes don't require any action from investors," Vanguard said in a statement, indicating that it's doing the heavy lifting behind the scenes. 

BlackRock is overhauling its iShares Global Telecom ETF to become the iShares Global Comm Services ETF, and changing the kinds of companies it tracks accordingly. 

"Longer-term, the 'less sexy' & somewhat 'forgotten' Telco names may gain mindshare & potentially garner more portfolio-manager interest/dollars as reclassification stirs a re-acquaintance," Chris Harvey, the head of US equity and quant strategy at Wells Fargo, said.

But unlike the Real Estate reclassification, most investors are no strangers to a good number companies being reshuffled, such as FANG stocks. 

Wells Fargo estimates that the reclassification will affect about 10% of the S&P 500, and so investors need not do much on the drawing board. Some stocks are getting moved around, but their weights on the index are not, so the reshuffle itself may not be a big market mover. 

See also:

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MoviePass

  • Many investors in the parent company of MoviePass, Helios and Matheson Analytics, have seen their stakes dwindle over 99% in recent months, with some losing over $100,000.
  • To fund massive MoviePass losses, Helios has flooded the market with new shares, diluting previous shareholders and sending the stock price plummeting.
  • Helios is trading at about $0.05.

When Ken, a retiree investor, logged into E-Trade in March to research a stock called Helios and Matheson Analytics, it looked like a killer deal.

"I use the analyst research to decide if I am going to buy a stock and after buying it, when to sell," Ken told Business Insider, describing a feature on E-Trade that allows retail investors to see a summary of the ratings — buy, hold, or sell — that Wall Street analysts have given a company.

Ken liked what he saw in Helios, the owner of the popular movie-theater subscription service MoviePass, which makes up essentially the company's entire business. Helios stock was trading under $5, but at the time the two Wall Street analysts covering the stock recommended that investors buy, with price targets of $15 and $16.

Ken saw a lot of upside in the Nasdaq-listed stock. On March 6, he bought 10,000 shares at $4.62, putting $46,200 into the stock, according to E-Trade screenshots shared with Business Insider. (Ken requested we not use his full name when discussing his personal finances, as did the other investors I spoke with.)

The stock didn't reach $16, or $15. It kept dropping. Over the next few months, Helios racked up tens of millions in losses because of MoviePass, which changed its pricing structure in ways that made it likely to lose money on subscribers who used the service to see just one movie a month in theaters; many saw more than that. To raise money, Helios flooded the market with hundreds of millions of new shares, which helped send its stock into a downward spiral.

But as Ken saw the share-price tank, the analysts kept their advice to "buy." And he did.

Ken bought in May, then in June, then in July — as the price dropped from $4.62 to $0.81 to $0.25 to $0.08. He stopped in late July, after Helios did a 1-to-250 reverse stock split that reduced his stake of 1 million shares to just 4,000 (but worth the same total amount). He had put almost $190,000 into Helios. His stake is now worth about $200.

Ken's story is not unusual.

This week, the no-fee stock-trading app Robinhood shut down trading of Helios, as first reported by my colleague Graham Rapier, saying it was doing so "to protect our customers from the risks associated with some low-priced stocks."

More than 74,000 Robinhood users hold the stock, the firm's website shows. And that's just one brokerage. E-Trade, which Ken used to buy shares, still allows its users to trade Helios stock. E-Trade did not respond to a request for comment.

There is a personal story behind each retail investor who holds Helios, many of whom have seen the value of their stakes drop by over 99%. Helios did not respond to a request for comment.

etrade analyst screenshot hmny moviepass

'Over half my retirement portfolio ...'

Last week, I wrote a piece about the two Wall Street firms — Canaccord Genuity and Maxim Group — whose analysts kept buy ratings on Helios until late July, as the firms made millions in fees helping sell the stock. After it published, I was contacted by many people who said they had lost big on Helios.

Some, like Ken, said they were retirees or had lost a big chunk of their retirement savings.

"I bought in for the same exact reasons and was fooled as well," one investor wrote. "I lost over half of my retirement portfolio trying to average down, thinking that the published data and info was accurate and true. Seriously, could not afford to lose that money either."

Other investors were younger, some of whom were a tad more optimistic about the loss.

One sent a Robinhood screenshot of his stake being down 99.96%, almost $12,000. Another screenshot showed an investor being down more than 10 times that, at nearly $165,000 in the red.

"I'm only 27 and that money was not easy to come by," the second said. He said he was planning to hold on to his stake for now, though he realized he was "totally falling for the sunk cost fallacy."

Still another investor said he'd encouraged friends to buy Helios based on the low price.

"We all know now how that has worked out," he said, adding he was personally down $50,000 on the stock.

'I looked on E-Trade and noticed the buy ratings ...'

So why did these investors decide to put their faith in, or gamble on, Helios?

Several cited the analyst recommendations, which isn't surprising given that it was the topic my previous piece focused on.

One said she first found out about Helios through a Facebook group for investors and put $8,500 into the stock in October. After that stake lost 99% of its value, she said, she went on E-Trade again in July to decide what to do.

"I looked on E-Trade and noticed the buy ratings," she said. "I thought, foolishly, after seeing a brief 40% increase in the stock from $0.10 to $0.14, that if I invested another $8,500 at $0.11 and it doubled, I would make my money back, or be happy to make 40% back. I was 100% encouraged by the buy rating of the analysts. I invested another $8,500 specifically because of those analysts' buy recommendations I saw on E-Trade."

After the reverse split, the value of her second stake sunk as well.

"I invested about $500 based almost entirely off those analysts buy ratings and price targets," another investor said. "My shares are now worth about $0.17 total. $500 might not sound like a lot, but it's a big deal to a single income family."

Other investors mentioned believing in MoviePass' business model as a reason for their investment. One made the decision to buy recently, after getting an email from MoviePass limiting him, as a customer, to three movies a month instead of one a day. MoviePass pays full price for tickets subscribers buy, so heavy users of the service can cost the company a lot of money.

"My wife and I are MoviePass subs and have only used it a few times," another said. "We are the subs that MoviePass was hoping to make a profit on."

Not all the investors were MoviePass users, however. Some heard about it from friends or found it through online sources like StockTwits, the social-media platform for retail investors.

'It's a gamble but ...'

Though most of those who wrote to me were angry, there are still some investors who haven't given up on Helios.

"You're fighting the regime just like Trump came in to drain the swamp," a Helios investor said in a shareholder meeting in New York in July. "You're fighting the regime. And everybody jumps on board and is ready to bash you. But you're really doing a good thing for the consumer."

And even after the torrent of negative press, some still see it as a potential buying opportunity.

A prospective investor wrote to me this week saying he was considering putting money into Helios at $0.05.

"It's a gamble but at this price, I'm a small investor in the market, and could afford to lose about $500, equivalent to approximately 10,000 shares, hoping that they can dig themselves out of the hole within a year potentially making a profit," he wrote.

He finished with a question. "In your opinion, would it be worth the gamble, and what is the potential," he asked, of Helios "becoming solvent again?"

If you are an HMNY investor, or know anything about the company or MoviePass, email the author at nmcalone@businessinsider.com.

SEE ALSO: 2 Wall Street banks made millions selling the collapsing shares of MoviePass' parent company, as their analysts kept 'buy' ratings on the cratering stock

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Walmart Inc posted its best quarterly U.S. sales growth in a decade and upped full-year sales and profit outlooks on Thursday, sending shares surging as a jump in online and grocery purchases showed it can hold its own against Amazon.com Inc .


U.S. President Donald Trump on Thursday again pressed U.S. Attorney General Jeff Sessions to sue drug companies over the nation's ongoing opioids crisis.


U.S. stocks and emerging market currencies rebounded on Thursday after China said it will hold trade talks with the United States later in August and Turkey's lira continued its recovery run.


Citigroup agreed to pay $10.5 million to settle two separate complaints, one relating to bad loans made by its Mexican subsidiary, Banamex, between 2008 and 2014, U.S. regulators said on Thursday.


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The legendary investor who predicted the past 2 bubbles breaks down how the 9-year bull market will end

In late 2017, the investing legend Jeremy Grantham was officially on bubble watch.

He said as much in a quarterly letter he coauthored for his firm, Grantham, Mayo, & van Otterloo (GMO), back in December. It wasn't an extremely pressing concern quite yet but something in the back of his mind.

That all changed in January when, as he describes it, stories of investor overconfidence became too numerous to ignore.

Grantham's favorite anecdote came courtesy of the bus one of his Boston-based colleagues would take to work from New Hampshire. Every morning, an elderly woman would see the GMO employee reading financial literature and ask questions.

A former Tesla engineer says the company silenced her entire team after they brought up safety and quality issues

In early August, a former Tesla process technician, Martin Tripp, countersued the company.

Tripp claims that Tesla, which filed a lawsuit against him in June, falsely accused him of hacking into the company's operating system. He also alleges Tesla waged a smear campaign against him in order to silence his claims of poor part quality and waste at the company.

For another former Tesla employee, Cristina Balan, Tripp's story feels familiar.

Balan began working for Tesla as an engineer in 2010. In a series of interviews with Business Insider, Balan said she was pushed out of Tesla four years later.

Turkey’s turmoil blew a $19 million hole in one trader’s account — here are the winners and losers from the crisis

Markets have been gripped by the developing crisis in Turkey over the last few weeks.

The country's currency plummet, contagion spread to other emerging markets, and a war of words broke out between President Erdogan and President Trump.

Traders love a crisis. A crisis tends to create volatility, which creates the opportunity to make larger sums of money by betting on price moves. The reverse, of course, is also true: losses tend to be greater in times of volatility.

It's no different with the Turkey situation, with several media reports of large financial institutions making and losing large sums of money.

Emails show RBS bankers joked about destroying the US housing market before 2008

Royal Bank of Scotland (RBS) bankers joked about destroying the US housing market and senior staff described the loans they were trading as "total f***** garbage," according to transcripts released by the US Department of Justice.

Email and call transcripts in a DOJ report released on August 10 as part of a $4.9 billion settlement with RBS show the bank's chief credit officer in the US said the loans they were selling were "all disguised to, you know, look okay kind of … in a data file."

He went on to say that the products being sold were "total f****** garbage" loans with "fraud [that] was so rampant … [and] all random."

The US Department of Justice criticized the bank for its conduct and trade in residential mortgage-backed securities (RMBS), which played a central role in the crisis.

In markets news

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Turkish Finance Minister Berat Albayrak hosted a conference call with global investors on Thursday in a bid to reassure them that policymakers are able to tackle the worst currency crisis the country has suffered since 2001.


J.C. Penney Co Inc shares sank below $2 for the first time on Thursday after it said it had alienated core middle-aged customers while chasing millennial buyers, and the venerable brand forecast an unexpectedly large loss.


jensen huang drive nvidia ces

  • Shares of Nvidia dropped as much as 1.2% to $256 in trading Thursday ahead of earnings.
  • Wall Street expects earnings per share of $1.85 f0r the chip maker's second quarter.
  • UBS analysts said their field work had suggested a several-month delay beyond the original August plan of the Turing's launch.
  • They have a target price of $285 and maintain a neutral rating on Nvidia.

Shares of Nvidia slid as much as 1.2% to $256 in trading Thursday ahead of the chipmaker's second-quarter earnings report after the closing bell.

Wall Street analysts expect the company to post adjusted earnings per share of $1.85 on revenues of $3.11 billion for the quarter ended June 30, according to Bloomberg.

On Monday, Nvidia announced a new graphics-processing unit (GPU) capable of supporting 8K video playback.

"With the launch of the Turing chip this week, Nvidia has solidified its market leadership position in the graphics and AI space," Geeta Chauhan, chief technology officer with Silicon Valley Software Group, said in a recent note sent out to clients.

"The new ray tracing engine will further expand Nvidia's footprint in the high end visualization for the movie industry and take over the large graphics rendering farms used for special effects generation," said Chauhan.

However, UBS said August 14 in a note that their field work had suggested a several month delay beyond the original August plan of the Turing's launch, which adds some gaming risk.

Analysts from UBS have a target price of $285 for Nvidia, and say they maintain a neutral rating for now.

Shares of Nvidia are up 27% since the start of this year.

Nvidia

SEE ALSO: The world’s largest hedge fund likes Alibaba

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private jet

  • A new report from the Economic Policy Institute showed the average CEO compensation at the US's 350 largest public companies grew to just under $19 million in 2017, up 17.6% from the year before.
  • At the same time, compensation for the average US worker grew 0.3% in 2017.
  • The ratio of CEO-to-worker compensation grew to 312-to-1 in 2017, up from a 58-to-1 ratio in 1989.

The compensation for CEOs at the US's biggest public companies continued to surge in 2017, according to a new report, but the workers in those same industries are seeing meager gains.

A study by the Economic Policy Institute, a liberal think tank focused on labor issues, found that total compensation for CEOs at the 350 largest publicly traded companies in the US rose to $18.9 million in 2017, up 17.6% from the year before.

But compensation for the average worker in the US rose just 0.3%.

The study, by EPI's Lawrence Mishel and Jessica Schieder, also found that the ratio of average CEO to worker compensation grew to 312-to-1. This is up from a 20-to-1 ratio in 1965, and a 58-to-1 ratio in 1989, but remains below the peak of 344-to-1 in 2000.

In comparison, CEO-to-worker pay is 94-to-1 in the UK and 91-to-1 in France, according to the Executive Remuneration Research Center at Vlerick Business School in Belgium.

To determine CEO compensation, Mishel and Schieder's study looked at stock options realized, salary, bonuses, restricted stock grants, and long-term incentive payouts. The researchers determined the reason for the CEO surge is mostly due to the stock component of many executive compensation packages.

"The surge in CEO compensation measured with realized stock options was driven by the stock-related components of CEO compensation (stock awards and cashed-in stock options), not by changes in salaries or cash bonuses," Mishel and Schieder wrote.

The increase in realized stock gains is unsurprising given the 20% surge for major US stock indexes in 2017.

The researchers also used a separate measure of stock gains to determine CEO compensation to help strip out some of the gains from last year's stock market surge.

"Because the decision to realize, or cash in, stock options tends to fluctuate with current and potential stock market trends (as people tend to cash in their stock options when it is most advantageous to do so), we also look at another measure of CEO compensation, to get a more complete picture of trends in CEO compensation," Mishel and Schider wrote. "This measure tracks the value of stock options at the time they are granted. By this measure, CEO compensation rose to $13.3 million in 2017, up from $13 million in 2016."

The research comes as focus on income inequality, the stark difference in wage growth for average American workers compared to their wealthy counterparts, remains a top focus for economists and politicians.

According to EPI, CEO pay is also growing at a much faster pace than even the average pay of the top 0.1% of income earners in the US.

From 1978 to 2017, CEO compensation grew 979% (on the stock options granted basis) or 1,070% (based on the stock options realized basis). At the same time, wages for the top 0.1% grew at 308%.

For the average worker, the compensation gain was even more meager at just 11.2%.

"Over the last several decades, CEO pay has grown much faster than profits, the pay of the top 0.1% of wage earners, and the wages of college graduates," the study said.

The pay bump comes even before the changes from the GOP tax law, so it is unclear how those changes will impact compensation for both workers and CEOs.

SEE ALSO: A Chicago-area manufacturer is laying off 153 workers and moving to Mexico partly because of Trump's tariffs

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Tesla Inc is on its way to make 8,000 Model 3 cars per week even as it burns more cash, Evercore analysts wrote in a note on Thursday, following their visit to the electric-car maker's California facility.


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beer cheers

  • Big beer companies are looking to develop marijuana-infused beverages as a way to revitalize their businesses.
  • Constellation Brands, the third-largest beer company in the US, this week invested $4 billion in Canopy Growth, a Canadian marijuana cultivator, to develop marijuana-infused beverages and other products.
  • And Lagunitas, Heineken's California-based brand, recently developed a hoppy, THC-infused sparkling waterAnd Molson Coors recently entered a joint venture to produce marijuana-infused beer for the Canadian market, among other deals.
  • Investors are excited about the prospect of creating a whole new class of marijuana consumers, though some questions still remain.

Big beer companies want in on the exploding legal-marijuana market.

Beer and liquor giants like Molson Coors, Heineken, and Constellation Brands — the company behind Corona — have pursued a flurry of deals to develop marijuana-infused drinks that they hope will give them a slice of the rapidly expanding pie.

Constellation, the third-largest beer company in the US, this week paid $4 billion for a 38% stake of Canopy Growth, the largest publicly traded marijuana grower, to develop marijuana-infused beverages and other products. It's the largest corporate investment in a marijuana cultivator to date. 

A handful of smaller firms and startups are seeking to build out products lines as well, either by developing their own brews or through strategic acquisitions.

"It's the next big evolution of the cannabis market," Keith Dolo, the CEO of consumer cannabis company Sproutly, said in a recent interview. ...

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SEE ALSO: One of the world's largest beer makers is about to start producing marijuana-infused drinks

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German financier in spotlight after lawsuit against US investment bank


Pedestrians walk past an electronic board showing currency exchange rates in Buenos Aires' financial district, Argentina, June 29, 2018. REUTERS/Agustin Marcarian

  • The collapse of the Turkish lira and the strong dollar have hit emerging market currencies globally.
  • If the trend continues, countries may start to have trouble paying back dollar-denominated debts.
  • Analysts say Argentina, Pakistan, South Africa, and Colombia are among those most at risk.


LONDON — The collapse of the Turkish lira against the dollar is the focus of global markets but emerging market currencies are getting hammered across the board and there are concerns that the issue could spiral from a currency crisis into a debt crisis.

The Indian rupee hit an all-time low against the dollar overnight, the South African rand has been diving, Argentina's central bank hiked rates by 5% on Monday to arrest the peso's decline, and Indonesia's government is meeting to discuss emergency measures to defend the sinking rupiah.

"EM [emerging market] currencies (judged by the Bloomberg EM currency basket) are now at their lowest nominal value in the past three years – below the level reached in early 2016 at the time of the commodity price fall and period of US$ strength," analysts Stuart Culverhouse and Hasnain Malik from emerging market specialist bank Exotix said in a note on Tuesday. ...

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DON'T MISS: India's rupee hits an all-time low as the Turkish lira crisis spills over to other currencies

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Burning Man 2015 question mark

  • Fitch, one of the "Big Three" credit ratings agencies, believes Brexit is now too complicated to call.
  • It has removed its base case, because "there is such a wide range of potential Brexit outcomes that no individual scenario has a high probability."
  • The ratings agency also believes that the possibility of a no deal Brexit is rising.
  • Follow all of Business Insider's Brexit coverage here.


LONDON — Fitch, one of the "Big Three" credit ratings agencies, now believes that the manner of the UK's exit from the European Union is now so unclear that it is impossible to forecast.

In a statement on Thursday afternoon, Fitch said it is abandoning its previous base case — effectively the Brexit scenario it saw as most likely — because there is too much uncertainty to forecast with any accuracy.

"We no longer believe it is appropriate to identify a specific base case," the agency said in a statement.

"An intensification of political divisions within the UK and slow progress in negotiations with the EU means there is such a wide range of potential Brexit outcomes that no individual scenario has a high probability," it added.

Previously, Fitch identified a scenario in which the UK leaves the EU in March next year with "a transition period until around December 2020 and a framework for a future Free-Trade Agreement" as its base case, but it now says that it "no longer ranks as significantly more likely than other possible outcomes."

With just over six months until the UK is scheduled to leave the EU, things remain highly uncertain, particularly after numerous government ministers and EU officials raised the serious possibility of a no deal Brexit. Trade Secretary Liam Fox recently said there is a 60% chance of it happening, for example.

While the government has set out its plans for leaving the EU in the so-called Chequers Agreement, many issues remain unsolved, including the Irish border question and how EU citizens will be registered in the UK after Brexit.

Fitch said that an "acrimonious and disruptive no deal Brexit is a material and growing possibility."

The agency warned that no deal would be a huge negative for the UK, saying that it would "substantially disrupt" trade and the economy.

"No deal is also a material possibility. This would substantially disrupt customs, trade and economic activity, with the depth of disruption depending on how quickly a 'bare bones' deal could be reached," the statement said.

As a result of these warnings, Fitch reaffirmed its negative outlook on the UK's sovereign debt, saying that it could downgrade the UK's credit rating in the event of a no deal Brexit.

"An outcome that adversely affected growth prospects could lead to a downgrade, as we said when we affirmed the rating in April," the agency said.

SEE ALSO: The 'unraveling' pound is on its worst run since the financial crisis — and it's only going to go downhill

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Applebee's 15

  • Applebee's parent company, Dine Brands, and its second-largest franchisee, RMH Holdings, are battling in court, with Dine Brands attempting to take control of dozens of the franchisee's restaurants.
  • RMH controls more than 140 Applebee's locations and filed for bankruptcy in May, blaming Dine Brands' "ill-advised and value-destroying" decisions for struggling sales and millions of wasted dollars.
  • The franchisee filed for bankruptcy at 3:30 a.m. on May 8, hours after Dine Brands' CEO issued an ultimatum: send $12 million in unpaid royalties by the end of the day, or lose your restaurants.
  • Dine Brands claims that RMH owes the company more than $23 million in unpaid and lost future royalties and other fees. 

There's a battle raging within Applebee's.

On one side is the chain's parent company, Dine Brands. On the other is Applebee's second-largest franchisee, RMH Holdings, which filed for bankruptcy earlier this year — at 3:30 a.m. on Tuesday, May 8, to be exact.

The bankruptcy filing came hours after a fateful phone call on Monday afternoon between Dine Brands CEO Steve Joyce and RMH representatives.

In the phone call, which is said to have lasted less than five minutes, Joyce said that if the franchisee didn't wire Dine Brands $12 million by the end of the day, dozens of the franchisee's stores would be shut down, according to three people with knowledge of RMH's thinking on the matter.

RMH said it was a shocking ultimatum, with one source with direct knowledge of the conversation calling it the equivalent of "having a nuclear bomb dropped on your head." This person asked to remain anonymous to be able to speak frankly about the situation. ...

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jcp, jcpenny, jc penny, retail, stores, shopping, shop,

  • Shares of JCPenney dropped 25% in early trading Thursday after missing Wall Street's estimates.
  • The reatiler also slashed its full-year guidance.
  • "Inventory receipts continued to outpace total sales performance this quarter due to prior purchase commitments," said Chief Financial Officer Jeffrey Davis.
  • Follow JCPenney's stock price in real-time here.

Shares of JCPenney plunged as much as 25% in pre-market trading on Thursday following the retailer's second-quarter earnings report, which fell short of Wall Street's expectations. The company also slashed its full-year forecast.

For the fiscal second quarter ended, JCPenney reported a loss of $0.32 per share, which was bigger than the Wall Street estimate of a $0.05 loss per share.

Looking ahead, the company downgraded its full-year guidance and now sees adjusted loss per share of $0.80 to $1 for the period, way down from its prior forecast of $0.07 to $0.13.

"Inventory receipts continued to outpace total sales performance this quarter due to prior purchase commitments," said Chief Financial Officer Jeffrey Davis in the earnings release.

"As such, we took necessary actions to markdown and clear excessive inventory positions across many of our categories, which encompasses more than just seasonal product or fashion misses," said Davis. "We will continue to take actions to right-size our inventory, better curate our assortment and most importantly, provide a solid foundation that we can continue to build upon as we move forward."

Shares of the company are down more than 35% since the beginning of 2018. 

Now read: 

JC Penny

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  • Walmart beat Wall Street's earnings expectations on Thursday, nearly doubling the forecasted same-store sales growth rate.
  • E-commerce grew 40% over the same period a year ago.
  • Shares rose more than 10% in early trading Thursday following the release.
  • Follow Walmart's stock price in real-time here. 

Shares of Walmart surged more than 10% in early trading Thursday after the US' largest grocer reported an uptick in same-store sales and digital orders that helped it top Wall Street’s expectations.

For the second quarter ended June 30, Walmart said it earned $1.29 per share where analysts had expected $1.22. Revenue also topped the expected $126 billion to come in at 128 billion.

The beat was fueled by a 4.5% uptick in same-store sales, a closely watched metric for retailers, which nearly doubled the forecasted 2.4%.

Walmart has also been aggressively pushing into the digital realm with expensive investments in companies like Jet.com, ModCloth, Bonobos and more. After taking a hit on its most recent fourth quarter earnings to pay for the acquisitions, they seem to be paying off. E-commerce sales were up 40% over the same period a year ago.

"We’re pleased with how customers are responding to the way we’re leveraging stores and e-commerce to make shopping faster and more convenient," Doug McMillan, Walmart's chief executive, said in a press release. "We’re continuing to aggressively roll out grocery pickup and delivery in the U.S., and we recently announced expanded omni-channel initiatives in China and Mexico."

Now read: 

Shares of Walmart are now up about 1% since the beginning of the year, but still well off their $109 high set in January.

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Here is what you need to know.

Martin Tripp posted dozens of photos he alleged came from inside Tesla. The former Tesla employee who is being sued by the company says the images show battery scrap, trailers containing battery waste, and documentation of punctured battery parts in Model 3 vehicles.

A former Tesla engineer says the company silenced her team after it brought up safety and quality issues. Tripp has filed counterclaims against Tesla including allegations that the company tried to intimidate him after he spoke out about what he saw as waste, quality, and safety issues.

The legendary investor who predicted the past 2 bubbles breaks down how the 9-year bull market will end. Jeremy Grantham, the cofounder and chief investment strategist at the $71 billion Grantham, Mayo, & van Otterloo, had his latest bubble thesis thwarted by President Donald Trump's trade war — but that doesn't mean he's sounding the all-clear for stocks.

Trump is rolling back restraints on US cyberwarfare, and it could make an attack on other countries more likely. Removing these Obama-era rules will make it easier for the US to go on the offensive and could deter attacks on the US, such as election meddling.

The pound is on its longest losing streak against the dollar since the depths of the financial crisis. After a strong start to 2018, the pound has slumped in recent months and on Wednesday traded below $1.27 for the first time in 14 months.

Turkey's lira is rallying after a $15 billion loan from Qatar. The dollar is down 2.5% against the lira to 5.8052 on Thursday morning. It follows a surge over the past week and a half that saw the dollar climb to over 7 lira at its worst.

'Tech trendiness' has spiked to its highest level in 15 years. Jim Paulsen, the chief investment strategist at The Leuthold Group, explains why that's signaling widespread market pain.

Stock markets around the world trade mixed. The Shanghai Composite (-0.7%) declined in Asia, and Germany's DAX (+0.4%) led gains across Europe. The S&P 500 is set to open up 0.4% near 2,834.

Earnings reporting continues. Walmart, Nvidia, and Nordstrom are among the companies reporting Thursday.

US economic data keeps coming out. Initial jobless claims and the Philadelphia Fed Business Outlook are out at 8:30 a.m. ET. The US 10-year yield is down 4 basis points at 2.85%.

SEE ALSO: The legendary investor who predicted the past 2 bubbles breaks down how the 9-year bull market will end

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Shares up 10% as retailer cheers higher traffic at stores and improved online sales


A sign is seen at the head office of the Royal Bank of Scotland (RBS) in St Andrew Square in Edinburgh, Scotland September 11, 2014. Scotland's two biggest banks have said they would relocate to England if Scots vote for independence next week, adding to the economic uncertainties the country faces if it decides to end its 307-year union with the rest of the UK. The diminished presence of RBS and Bank of Scotland-owner Lloyds Banking Group, along with other leading financial groups which have also said they might relocate some operations on a

  • Emails released by the US Department of Justice (DOJ) show RBS bankers joking about destroying the housing market before the 2008 crash.
  • RBS’s chief credit officer described the products he was selling to investors as "total f****** garbage" loans with "fraud [that] was so rampant … [and] all random."
  • The DOJ said the bank made "false and misleading representations" to sell more mortgage-backed securities, adding that senior executives "showed little regard for their misconduct and, internally, made light of it."
  • RBS paid $4.9 billion earlier this year to settle the investigation.


LONDON — Royal Bank of Scotland (RBS) bankers joked about destroying the US housing market and senior staff described the loans they were trading as "total f***** garbage," according to transcripts released by the US Department of Justice.

Email and call transcripts in a DOJ report released on August 10 as part of a $4.9 billion settlement with RBS show the bank’s chief credit officer in the US said the loans they were selling were "all disguised to, you know, look okay kind of … in a data file."

He went on to say that the products being sold were "total f****** garbage" loans with "fraud [that] was so rampant … [and] all random."

The US Department of Justice criticized the bank for its conduct and trade in residential mortgage-backed securities (RMBS), which played a central role in the crisis.

The DOJ said the bank made "false and misleading representations" to sell more RMBS, adding that senior executives "showed little regard for their misconduct and, internally, made light of it."

When the contagion in the housing market became clear, the head trader at RBS got a call from a friend who said: "[I’m] sure your parents never imagine[d] they’d raise a son who [would] destroy the housing market in the richest nation on the planet."

"I take exception to the word 'destroy.' I am more comfortable with 'severely damage,'" he replied.

The bank disguised the risks to investors while making hundreds of millions from a housing market that a senior RBS banker described as broken, incentivising bad loans that meant lenders were "raking in the money."

Employees who might raise the alarm about the risky practices "don’t give a s*** because they’re not getting paid," he said.

The transcripts reveal that as the banking system started showing signs of break-down by early October 2007. The chief credit officer at RBS wrote to colleagues saying that loans were being pushed by "every possible … style of scumbag," and it was "like quasi-organised crime."

"Nobody seems to care," he said.

A senior bank analyst at RBS also described the bank's due diligence process on loans as "just a bunch of bullsh**," according to the DOJ.

In May 2018 RBS chief Ross McEwan said the deal with the DOJ to end the investigation was a milestone for the bank. "Our current shareholders will be very pleased this deal is done. It does help the government sell a cleaner bank," he said.

SEE ALSO: RBS is swallowing a 'milestone' $4.9 billion fine for its role in the financial crisis — and shares are going up

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Jeremy Grantham

  • Jeremy Grantham, the cofounder and chief investment strategist at the $71 billion Grantham, Mayo, & van Otterloo, has become a world-renowned market voice by calling the past two major financial bubbles.
  • He was growing ever-convinced of a severe bubble burst earlier this year, until President Donald Trump's global trade-war escalation injected skepticism into the market, nipping a mounting crash in the bud.
  • Grantham has now adjusted his market outlook to something far less immediately severe than a bubble-driven crash — but argues considerable pain could still be in store for investors.

In late 2017, the investing legend Jeremy Grantham was officially on bubble watch.

He said as much in a quarterly letter he coauthored for his firm, Grantham, Mayo, & van Otterloo (GMO), back in December. It wasn't an extremely pressing concern quite yet but something in the back of his mind.

That all changed in January when, as he describes it, stories of investor overconfidence became too numerous to ignore.

Grantham's favorite anecdote came courtesy of the bus one of his Boston-based colleagues would take to work from New Hampshire. Every morning, an elderly woman would see the GMO employee reading financial literature and ask questions.

One inquiry in particular stuck out to him: Should she sell her house worth about $300,000 and put it in the stock market?

"What do you expect to get?" the GMO employee recalled asking.

Her response stunned him. And when he relayed it to Grantham, the market guru was sure an unsustainable situation was afoot.

"Well, the market has been rising at 17% per year," she'd replied. "And I'd be hoping for 20%."

That, to Grantham, was stock market overexuberance personified — and a glaring warning sign of an impending financial bubble. He began to brace in earnest for an imminent bust.

This was significant, since predicting major asset bubbles is what has made Grantham such a world-renowned investor. His track record speaks for itself. He predicted the dot-com and housing bubbles that wound up crushing markets. In fact, his otherworldly prescience actually extends back to the late 1980s, when he called a bubble in Japanese equities and real estate.

But mere months after his January revelation, something happened that made him reconsider once again. And President Donald Trump was at the center of it.

We were only a few months from being in ecstasy land.

"We were only a few months from being in ecstasy land," Grantham, the cofounder and chief investment strategist at GMO, which oversees $71 billion, told Business Insider by phone. "Then the trouble with trade, and the US proposals for tariffs that have now become more than proposals, came into play."

An outlook derailed by Trump's trade war

Grantham estimates that if the trade sanctions and tariffs announced and gradually implemented by Trump hadn't materialized, the market could be 10% higher than it is today.

Such a continuation of overstretched valuations would've perfectly met his definition of a "melt-up" in stocks — otherwise known as the period of steep increases that normally occurs at the end of a market cycle, before the bubble bursts.

"The effect on currencies and emerging markets has really made it difficult to maintain a super-high level of euphoria," Grantham said. "I consider this a melt-up nipped in the bud by you-know-who."

While many pundits have decried Trump's trade escalation as heavy-handed and potentially damaging to the global economy, in an ironic twist of fate it may have saved the US market from a painful explosion.

We have no experience of a decadelong bull market fizzling out. Here we are, in no-man's land.

But to hear Grantham tell it, that may not have been such a good thing.

"It’s a pity, because we know how great bull markets and great economies end," he said. "They traditionally end with a melt-up and a blowup. What about when that doesn't happen? Who knows? We have no experience of a decadelong bull market fizzling out. Here we are, in no-man's land."

That's not to say the market landscape is devoid of bubble-like behavior. A few years ago, Grantham said the latest cycle wouldn't reach peak bubble conditions until at least one of two things happened: a new high in deals or a new high in initial public offerings.

Well, as it now stands, merger-and-acquisition activity is, in fact, occurring at a record pace. And if you consider IPO equivalents — such as when a private company is acquired by what Grantham calls "the Googles of the world" — another record situation may be forming.

Grantham sees this, but he can't fully talk himself into a dangerous bubble — not since Trump's trade tensions injected a big dose of skepticism into the market. That's a far cry from his dot-com and housing bubble calls, in which his level of conviction was through the roof.

"There are decent indicators of the market being in a late stage," Grantham said. "But that still doesn't free us from the conundrum of — how can we end if we don't get a spectacular blowup and a collapse? Collapses in the past have needed that last adrenaline shock — that last 30% or so of complete speculation."

Grantham's new bull-market endgame

Just because Grantham's expectation for a sudden market crash has been muted doesn't mean stocks will continue climbing indefinitely. He says it simply means the inevitable downturn will be a protracted version of prior meltdowns.

My guess is — you have an extended, very psychologically painful, long, drawn-out series of stumbles and starts.

The problem is, there's no real precedent for a bull market ending in such fashion. But Grantham still ventures to offer a grand prediction — one characterized by regular bouts of moderate turbulence that he says will wear on the psyches of investors.

"My guess is — you have an extended, very psychologically painful, long, drawn-out series of stumbles and starts, where you go up 10% and down 15%, up 12% and down 14%," he said.

"You have this series of nonspectacular, ordinary mini-bear markets that wear away at the P/E, and eventually the economy weakens, and eventually the profit margins go down," Grantham continued. "It helps drip, drip, drip the market back down. Not with a bang — more with a whimper."

Grantham does note that blockbuster earnings growth has already eroded traditional measures of P/E in recent quarters, as profits have outpaced share gains; however, that would be more encouraging if US profit margins weren't already at an all-time peak and thereby primed to drop.

Ultimately, when it comes to Grantham's forecast "drip" down in stocks, Trump's trade war still takes center stage. He says now that the market was deprived of one last bout of speculative fervor, the eventual market meltdown will be less immediately severe. Rather than being spring-loaded to quickly drop, say, 50%, he says it will instead fall 20% to 25% over multiple years.

Still, Grantham isn't ruling out a continuation of January's dangerous "melt-up." He says that if the trade war gets resolved or turns out to be less punishing for investors than initially advertised, speculative behavior could come roaring back.

But judging by how things have gone in recent months, that seems like a stretch.

"Back last December, I said there was a 50% chance that we'd have a traditional melt-up and blowup," Grantham said. "That's gradually come down every week these trade and currency war things go on, and as we come closer to the end of this economic cycle."

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Sad trader happy trader

  • The collapse of the Turkish lira is the big story in global markets.
  • A big winner has been Deutsche Bank's CEEMEA desk, which made $35 million over two weeks on the back of emerging market turmoil, according to Bloomberg.
  • But a Barclays trader lost $19 million trading Turkish bonds over three days.
  • Millennial investors in the US have also been stung by the turmoil.


Markets have been gripped by the developing crisis in Turkey over the last few weeks.

The country's currency plummet, contagion spread to other emerging markets, and a war of words broke out between President Erdogan and President Trump.

Traders love a crisis. A crisis tends to create volatility, which creates the opportunity to make larger sums of money by betting on price moves. The reverse, of course, is also true: losses tend to be greater in times of volatility.

It's no different with the Turkey situation, with several media reports of large financial institutions making and losing large sums of money.

The biggest win reported so far is at Deutsche Bank, where a group of fixed income traders made a profit of $35 million in less than two weeks, according to a report published by Bloomberg.

The traders, who trade from a desk "focused on central and eastern Europe, the Middle East and Africa," made as much as $10 million in a single day on August 10, which saw the biggest fall in the Turkish lira, Bloomberg's story says citing people with knowledge of the matter.

Prior to the lira's slump, the team had positioned itself to profit from falling asset prices across the region, although it is not believed that they had placed any trades specifically focused on the Turkish crisis.

The desk from which the profits came has reportedly made $135 million this year, trading products connected to credit in the region.

Deutsche Bank declined to comment when contacted by Business Insider.

But not everyone is having a good time

Bloomberg also reports that a senior trader at Barclays lost around $19 million over the course of three days trading Turkish bonds.

That figure is relatively small in the grand scheme of Barclays' emerging market corporate fixed-income trading operation, from which the bank makes revenues of around $100 million per year, but still represents a significant amount of money.

"Barclays has an established and diversified credit business with all our trading positions hedged across the business," the bank said in a statement provided to Bloomberg. It added that its Turkish trading operation "represents a very small part of our overall credit business."

Barclays declined to comment further when contacted by Business Insider.

Other investors to be stung by the Turkey crisis include millennials using popular platforms like Betterment and Wealthfront. The businesses, which are two of the most popular online investment platforms in the US, are both top 10 holders of the Vanguard FTSE Emerging Markets exchange-traded fund.

The fund makes up as much as 15% of some portfolios on Betterment. The Vanguard ETF has lost more than 7% of its value since the start of August.

Turkey's crisis has spiralled in recent weeks, with a sharp fall in the Turkish lira the most obvious impact.

The lira's initial slide came amid rising tensions between the US and Erdogan over trade. US President Donald Trump authorized increased tariffs against Turkey on Friday in response to Turkey's unwillingness to release an American evangelical pastor, Andrew Brunson, who has been imprisoned in the country since late 2016.

SEE ALSO: Turkey is blaming social media and 'fabricated news' for the collapse of its currency

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The Turkish lira continued to retreat from its historic low against the dollar on Thursday after Qatar announced a $15 billion funding package for Turkey's wobbling economy.

The dollar is down 2.5% against the lira to 5.8052 at 8.12 a.m. BST (3.12 a.m. ET) on Thursday morning. It follows a surge over the last week and a half that saw the dollar climb to over 7 lira at its worst.

The latest strengthening of Turkey's currency comes after Qatar announced a $15 billion funding package for Turkey late on Wednesday evening.

Tamim bin Hamad Al Thani, the Amir of Qatar, tweeted: "Today, in the framework of important negotiations with His Excellency President Erdogan in Ankara, we announced a package of deposits and investment projects worth $15 billion in this country, which has a productive, strong and robust economy."

Turkish President Tayyip Erdogan tweeted: "On behalf of the Turkish people, I sincerely thank Sheikh Tamim and the Qatari people for standing by Turkey. There is no doubt that our strong relations with the friendly and brotherly state of Qatar will continue to evolve in many areas."

Turkey's currency has come under pressure due to rising diplomatic tensions and cooling trade relations with the US, Erdogan's perceived control over the country's central bank, and a strong US dollar. Erdogan has accused the US of waging an economic "war" against the country.

The lira pressure began to ease on Monday when the Turkish central bank promised it would take "all necessary measures" to protect the economy. Turkey's banking watchdog on Wednesday also moved to crack down on shorting of the lira.

Hussein Sayed, the chief market strategist at FXTM, said in an email on Thursday: "Such measures may only provide short-term relief and policymakers need to address the longer-term challenges that will face the country.

"With inflation expected to skyrocket in the coming months, a current account deficit that exceeds $50 billion and more than $16 billion of debt maturing in 2019, investors fear that the currency crisis will turn into a debt crisis.

"Even if tensions between the US and Turkey are resolved, investors still need to see serious fiscal and monetary measures to restore confidence."

SEE ALSO: Turkey's central bank promises 'all necessary measures' to save its financial system amid lira collapse

DON'T MISS: The lira surged 7% after Turkey hit back at US 'attacks' by slapping American cars, alcohol, and tobacco with huge tariffs

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