Don't make up your performance numbers.

This is a charming story about a kid who carefully changed all the F's on his report card to B's and then proudly handed it to his parents, but then the parents called the teacher and were like "did little Johnny really get all B's?," and the teacher said "no something has gone horribly wrong here," and then little Johnny got in big trouble. Only little Johnny is a "hedge fund" ($8 million under management from 9 investors), the report card was its review of investment performance, the teacher was its auditor, the parents were its investors, the F's were its actual negative 3 percent return, and the B's were its pretend positive 30 percent return. (Try it yourself: take "-3," add a zero on the end, and put a vertical slash through the minus sign?) And big trouble is an asset freeze and an SEC enforcement action.

Everything is scary.

This sentence can't come as much of a surprise:

Regulators on the Financial Stability Oversight Council on Wednesday said they are monitoring new practices by nonbank financial firms -- including mortgage-servicing companies, insurers and asset managers -- over concerns that their activity could pose an emerging threat to the financial system.

Yesterday I linked to John Cochrane's skepticism that asset managers could be systemic threats; he in turn quoted Doug Diamond for the proposition that "Financial crises are always and everywhere due to problems of short-term debt" and did not believe that large but unlevered asset managers could cause a crisis. And mortgage servicers, what? Consider the FSOC's incentives to say "Activity X is not a threat to financial stability," though. One, if Activity X actually blows up -- not even in a way that threatens stability, just in a way that looks bad -- then the FSOC look like chumps. And, two, if you actually stabilize the banking system, what is the role of the FSOC? Obviously a forward-looking FSOC staffer would say that it's to go around stabilizing some other things.

Dan Loeb did well on Sotheby's.

As part of their settlement, Sotheby's is paying Dan Loeb up to $10 million for his proxy fight and litigation expenses, which is a useful data point in just sizing the costs of activism. If you think that activists shouldn't be able to keep their intentions and accumulations secret because it rips off public investors, how do you deal with activists spending millions of dollars for the benefit (maybe?) of public investors. Anyway in return for the money, and the board seats, Third Point agreed to a standstill, and not to "make, or cause to be made, any statement or announcement that relates to and constitutes an ad hominem attack on, or relates to and otherwise disparages, the Company, its officers or its directors or any person who has served as an officer or director of the Company in the past." Weirdly (unsurprisingly?) there's no such agreement the other way.

Goldman is working to keep criminals out of jail.

I know, right? Goldman is an investor in social-impact bonds "to help a Boston-area nonprofit called Roca expand its efforts to steer young men" away from a life of crime and into a life of, it's not investment banking is it? No, it's not investment banking, Roca's "aim is to get such men into the legitimate economy." Goldman makes more money the less time its target group spends in jail. This seems like a good thing, though the article quotes some pro forma criticisms of social-impact bonds ("The popularization of these private finance mechanisms in some program areas might eventually allow government to say, ‘Sorry, we couldn’t raise private capital for it,’ and to walk away," says a guy.) But it's Goldman Sachs! Surely the proper deranged criticism is that Goldman will find an arbitrage here. If it makes money if people stay out of jail, can't it use some of that money to pay off cops and judges to make sure its bet pays off?

Bitcoin alert.

I keep trying to imagine the class of investors who both (1) are likely to be suckered by a Bitcoin scam and also (2) read Securities and Exchange Commission Investor Alerts. All I can come up with is financial journalists; is that the target audience here? Anyway this alert is broader than Bitcoin: "A new product, technology, or innovation – such as Bitcoin – has the potential to give rise both to frauds and high-risk investment opportunities." Just to be safe, avoid innovation!

Things happen.

Michael Lewis podcast. Michael Milken feminist. Homeownership tax expenditures elitist. Dynasty checklist. Aubrey McClendon is free to go. Former Galleon Group trader Turney Duff knows how to get you a copy of a "Harry Potter" book for only $120 or so.

They spoke in unison.

Everyone knows the quotes in press releases are fake right?

James R. Moffett, Chairman of the Board; Richard C. Adkerson, Vice Chairman, and FCX President and Chief Executive Officer; and James C. Flores, Vice Chairman, and FM O&G President and Chief Executive Officer, said, “This transaction represents an important step in our ongoing debt reduction plan while providing additional capital to enhance our portfolio of assets with superior margins and growth characteristics.”

To contact the writer of this article: Matt Levine at mlevine51@bloomberg.net.

To contact the editor responsible for this article: Tobin Harshaw at tharshaw@bloomberg.net.