Let’s take the decision to file the complaint in the first place. What, exactly, made Bridgewater think Lawrence Minicone and Zachary Squire had absconded with the secret sauce, held onto it for three years and then put it to their own uses? Why, a leaked marketing deck that looked nothing like its own.

‘You have to be willing to look like an idiot in the short term to get the best long-term results. I’d suggest that because the future has become increasingly uncertain, he’s preparing for the widest range of possible futures….’

“People always seem to want the optimal solution for the moment, and thus he ends up looking out of touch at times,” Parrish, a longtime attendee of Berkshire’s annual meeting, told Business Insider. “But you have to be willing to do something different to get different results….”

“You can’t win if you don’t finish... you can’t compound if you zero out,” Parrish said. “In periods of high uncertainty, you want to ensure you have the most possible options.”

But UBS is less exposed than its European rivals. Like Morgan Stanley and Goldman Sachs in the U.S., UBS has a relatively low level of credit risk. Thanks to its strategic focus on wealth management, riskier forms of lending are limited. Most of its loan book is secured: Over half are mortgages, most of them in Switzerland, with a 55% average loan-to-value ratio, and another third are so-called Lombard loans to wealth-management clients backed by securities, with a 50% average LTV.

Hempton freely admits to investors in the $362 million Amalthea Fund that Wirecard was the biggest loser of any stock in the decade-long history of his firm, Bronte Capital…. Hempton says in his letter to Amalthea investors that the present environment for shorting is particularly dangerous because "all crappy stocks rise at the same time, across sectors"….

"Even in a well-diversified short book, things can go wrong. Wirecard, for example, didn’t go wrong all at once but it cost us considerable money over a decade and was a drag on performance.

"It was a winner last quarter, but that was small consolation."

EU leaders reach $2 trillion deal on recovery plan after marathon summit [CNBC]In the end, they agreed to distribute 390 billion euros, out of the total 750 billion fund, in the form of grants — a significant reduction from an initial proposal made by France and Germany in May for 500 billion euros of grants. The EU also agreed that net debt issuance will end in 2026 and that they will repay all the new debt by 2058.In the meantime, member states will also have to develop plans outlining how they will invest the new funds. These so-called Reform and Recovery plans will have to be approved by their European counterparts, by qualified majority — rather than by unanimity as had been insisted upon by the Netherlands at one point.

Bankers at Credit Suisse Group AG, HSBC Holdings Plc, Julius Baer Gruppe AG and UBS Group AG, among others, are broadening scrutiny under their programs that screen clients for political and government ties and subjecting them to additional diligence requirements, these people said.

The designation, called politically exposed persons, can make it more difficult or altogether prevent people from accessing banking services, depending on what the bank finds about the person’s source of wealth or financial transactions.

Back in 2014, Jeff Immelt had an idea: He would cap what would by then be a nearly two-decade run at General Electric’s helm by transforming the 120-year-old industrial conglomerate into a cutting-edge software shop. The Mill River Valley would rival Silicon Valley when it came to big-data innovation. Sure, GE didn’t know the first thing about digital technologies, the cloud, etc., but it knew a whole lot about the things those things connected to and controlled. By 2020, GE Digital would be bringing in $15 billion a year in revenue.

‘Less Optimistic’ and ‘More Cautious’: Top C.E.O.s Fret as Virus Cases Rise [NYT]“We will need to open up, but it has to be done safely and properly,” said Jamie Dimon, chief executive of JPMorgan Chase. “And if we make mistakes along the way or if situations change, we should adapt and recalibrate….”“Most C.E.O.s today believe that until there is a more effective treatment or a vaccine, that work and life are not going to go back to normal,” said Julie Sweet, chief executive of Accenture.Ms. Sweet said even in Europe, where the virus is largely under control, business leaders are anticipating flare-ups that could disrupt the economy again. “In Europe, we have clients saying, ‘We want you back,’ and in the next breath saying, ‘Of course, that will change,’” she said.

Asset managers owned by minorities and/or women run just over 1% of that industry’s $71 trillion hoard. A trial in London is helpfully illustrating why.

Amanda Staveley, who runs one such firm, private equity shop PCP Capital, is suing Barclays for allegedly screwing both her firm and her client, an Abu Dhabi sovereign wealth fund, over. Specifically, she says the bank gave far better terms to the Qatari investors who helped bail it out back in 2008, while also refusing to pay her for her troubles.

Wirecard Woe Spreads as Banks Struggle to Exit Loans [WSJ]Wirecard’s debt load includes a €1.75 billion ($2 billion) revolving credit facility. Lloyds Banking Group PLC is one of the 15 lenders to that facility. It is owed around €120 million, yet sold the holding recently at around 18 cents on the euro to distressed debt hedge funds, according to the people and others familiar with the transaction…. Last week, another bank that participated in Wirecard’s revolving credit facility tried to sell €200 million of the loan, according to some of the people. The auction failed, the people said.

How Germany’s SEC Dismissed a Decade of Warnings About Wirecard [WSJ]Documents show the Federal Financial Supervisory Authority, or BaFin, saw Wirecard’s former CEO, now under criminal investigation, as more trustworthy than his critics because he bought a large chunk of shares in the company at a key moment…. BaFin’s decadelong blind spot for Wirecard now raises questions about the...

“As states began to reopen in the past couple months, we saw an improvement in spending levels as customers became more active buying fuel and spending on home projects and eating out,” [Bank of America CEO Brian Moynihan] said on a call with analysts.

Alexei Orlov of the U.S. Securities and Exchange Commission and Massimo Guidolin of the Bocconi University in Italy tested 10 investing strategies against 18 unconventional monetary policy announcements from the Federal Reserve and European Central Bank between 2008 and 2016…. hey found monetary policies are directly hitting more than half of the strategies, and indirectly whiplashing virtually the entire industry.

Two former partners at the hedge fund Deerfield Management and a political consultant found guilty of insider trading will remain free on bail while they petition the U.S. Supreme Court for certiorari, a federal appeals court has ruled.

Bridgewater Associates and former co-Chief Executive Officer Eileen Murray are still negotiating an exit package three months after she left the world’s biggest hedge fund -- a fight that has dragged on because Bridgewater’s offer is both less than what has been paid to men who left the firm and below the status of her position, one of Murray’s advisers said…. Her adviser, who asked not to be named because of the sensitivity of the situation, said this was the third time since 2017 that Bridgewater offered her compensation that was lower than male colleagues at comparable levels.

Bankers Shocked by 45% China Tax Rate Mull Leaving Hong Kong [Bloomberg]Faced with a tax rate as high as 45% -- up from about 15% previously -- Chinese professionals across Hong Kong are considering moving back home to avoid getting squeezed by both the new levy and sky-high living costs in the former British colony…. The prospect of an exodus has upended expectations that mainland talent would help offset any outflow of locals and foreign expatriates from Hong Kong, many of whom are looking to escape the city’s controversial new national security legislation…. For now, it appears that only SOE employees who transferred from China have been explicitly instructed to pay taxes on their 2019 income. It’s unclear how Chinese authorities will apply the tax laws to citizens who were hired overseas or who don’t work for state-owned companies.

“Hedge funds and private equity firms receive funds from entities registered in nations that maintain laws conducive to masking underlying beneficial owners,” which makes it harder for U.S. financial institutions and regulators to determine the source of funding, the FBI bulletin read…. Martin Kenney, a British Virgin Islands-based asset recovery attorney who has represented victims of hedge-fund swindler Allen Stanford and other frauds, said: “It stands to reason that a not-insignificant proportion of the capital managed by private investment funds is dark money.”

U.S. Stocks Climb After Promising Vaccine Study [WSJ]Signs of progress toward a coronavirus vaccine by Moderna propelled all corners of the stock market higher. Goldman Sachs Group added to the advance after reporting one of its best quarters by revenue ever…. That all pushed the blue-chip index up 218 points, or 0.8%, to 26858 in recent trading, putting the Dow on course for its best week in more than a month. The S&P 500 rose 0.8%, nearly bringing the broad index out of the red for the year, while the Nasdaq Composite advanced 0.3%.

“Realize that you have nothing to fear from the truth.” It’s right up there at the top of Bridgewater Associates founder Ray Dalio’s principles, just after “trust in truth” and “have integrity,” “be radically transparent” and “don’t tolerate dishonesty.” Nowhere, not even in a lettered or sub-numbered sub-principle, do we find “make things up when convenient” or “ignore the contents of the Bridgewater Blockbuster if it does not help make your point.”

The largest U.S. banks signaled that the worst of the coronavirus recession is yet to come, opting… collectively stockpile $28 billion to cover losses as consumers and businesses start to default on their loans.

Since President Donald Trump took office, the OCC has quietly shelved at least six investigations of discrimination and redlining, according to internal agency documents and eight people familiar with the cases…. In each case, despite staff recommendations that fines or other penalties be imposed, the OCC took no public action and closed the investigations quietly….

The OCC has historically prioritized the well-being of banks over bank customers, said current and former examiners, but the balance has shifted even further under the Trump administration.

When Jeffrey Epstein was arrested a year ago on a new set of sex-trafficking charges, his primary bank professed to be shocked—SHOCKED!—at the depth and scope of their relationship with the convicted sex criminal. How could this happen, they wondered. After all, the bank spluttered—hilariously—after reaching a $150 million deal with New York regulators over the whole sordid affair, its reputation is its “most precious asset.”

And not just its reputation, apparently, but those of the actual human beings employed by Deutsche Bank to make decisions for Deutsche Bank about, say, whether to open dozens of accounts and lines of credit to a man who was allegedly a financier but who was indisputably guilty of underage prostitution. The Department of Financial Services consent order does a much better job of hiding their names than Epstein’s buddy did of concealing herself from the FBI, behind terms such as “RELATIONSHIP MANAGER-1” and “EXECUTIVE-1.” This is bad.

Sobering Economic Data From Europe, Asia Dash Hopes for Swift Recovery [WSJ]The U.K. economy expanded just 1.8% in May compared with April, a month that saw the country’s deepest contraction on record, according to figures published Tuesday. The rebound was feebler than economists had predicted and output in Britain remains around a quarter below the level it had reached in February.Singapore—among the first countries to report second-quarter gross domestic product figures—estimated its economy shrank in the period by an annualized 41.2%. While Singapore has been lauded for public-health policies that have largely contained infections, its economy nonetheless suffered from the collapse in global trade….The Organization for Economic Cooperation and Development said this month it expects the global economy to shrink 6% this year—or almost 8% if a resurgence in infections prompts governments to once again button down their economies.

Now the office of the Manhattan district attorney, one of the most coveted prizes in American law, is again up for grabs -- and the list of contenders is growing to unseat Cyrus Vance Jr. in the polls next year. The latest is Tali Farhadian Weinstein, a seasoned federal prosecutor with an unusual insight into the ways of Wall Street: She’s married to Boaz Weinstein, the hedge fund magnate behind the $3 billion Saba Capital.

Only groups with assets of more than $3.5bn will have to submit so-called 13F filings with the regulator — one of the few ways of tracking which stocks hedge funds are buying and selling. The current threshold is just $100m….

Allison Herren Lee, the SEC’s lone Democratic commissioner, said the proposal lacked “a sufficient analysis of the costs and benefits” and reduced transparency.

“This proposal joins a long list of recent actions that decrease transparency and reduce both the commission’s and the public’s access to information about our markets,” she said in a statement.