Bill Ackman has a lot on his mind.

Here (via the New York Post) you can read Pershing Square's most recent investor letter, which is full of interest.1 There's a vigorous defense of shareholder activism, with a digression into why funds like Pershing Square shouldn't have to disclose their positions too quickly ("Activism has a 'public good' problem for the activist in that all of the other shareholders who typically comprise 90% or more of a target can be considered free riders with none of the costs or the illiquidity, and with all of the upside."). There's a long attack on Allergan's board and management as self-serving sandbaggers. There's a preview of the public listing a of Pershing Square fund later this year, to raise permanent capital and reduce the need to hold cash, and I guess it is weird that investors are paying Ackman hedge-fund fees on the chunk of their money that he holds in cash. And then of course there is Herbalife, which actually helped Ackman out a bit when it canceled its dividend to do more stock buybacks:

We maintain a short stock and long put position in HLF. As the company has cancelled its dividend and the interest cost of borrow has remained in the low single digits, our cost of carry for this position has declined substantially.

People are worried about repo.

Here is a speech by William Dudley of the New York Fed that is critical of the use of short-term wholesale finance by banks. It's a good overview of the rise of shadow banking, the current worries about tri-party repo fragility, etc., and kicked off a conference yesterday about those issues. And the Boston Fed's Eric Rosengren called for an increasingly popular fix, requiring higher capital levels of banks that use a lot of repo. That's probably sensible enough; liquidity and capital are to some extent substitutes for each other and if you have lots of flighty short-term funding you should maybe worry about that, and express your worry in terms of capital. Elsewhere people are still worried about repo fails -- where Treasuries are not delivered as promised to cash lenders -- and while I guess those are bad I'm not entirely clear on what the worry is. For instance, the present rate of fails does not mean that people are getting nervous about lending banks money. It's more the reverse: It means there's more demand from cash lenders to lend against Treasuries than there are Treasuries.

Buy some non-performing mortgage bonds!

Will the private-label mortgage-backed-security industry ever come back? I mean, sure, why not? There are some prime jumbo securitizations these days, and there are also short-dated securitizations of non-performing loans:

For mutual funds and other institutional investors, the appeal of these bonds is obvious. They have yields of about 4 percent and pay out quickly -- often in just two years -- if the foreclosure process on the loans in the portfolio goes smoothly. .... So far this year, there have been 28 deals backed by $7 billion worth of nonperforming loans sold to investors, according to Intex Solutions, a structured finance cash-flow modeling firm.

It'll be a while (forever?) before you see a robust market in private-label subprime securitizations, but it's a sign of something that the very top end (prime jumbo) and very bottom end (already defaulted!) of the market are both creeping back.

How's the SEC doing?

Here is Jesse Eisinger on the Securities Exchange Commission, specifically on how Mary Jo White was supposed to toughen it up but hasn't. There are some weird complaints here, like how the SEC has disagreed with Treasury about whether big asset managers should be regulated as too-big-to-fail. Eisinger knows the SEC is right on this one, but nonetheless blames the SEC because "regulators need to work together and not allow industries to exploit regulatory turf battles." The idea I suppose is that regulators are not supposed to do anything that the financial industry wants, even when industry is right. Elsewhere the SEC's intensive investigation into who told journalists about some pretty mundane London Whale news is not at all a good look.

How not to do fraud.

Don't want to give legal advice blah blah blah but can you spot what's wrong with this e-mail?

In July 2009, Gabriel Bitran said to his son in an e-mail, “We have mislead (sic) a lot of people with a range of statements that were incorrect simply to increase our income.’’

Not the typo I mean, the admitting fraud and bad motive over e-mail. Gabriel Bitran and his son Marco eventually figured it out, because they pleaded guilty to criminal securities fraud rather than, what, going to trial and being like "nononono that e-mail was just a joke we were great"? Anyway don't do that.

How not to punish fraud.

The way that the federal sentencing guidelines work is that the main thing that determines your sentence for criminal securities badness -- fraud, insider trading, etc. -- is how much money was involved. So if for instance you tell your friend about a merger, and then your friend tells his friend, and then his friend tells his boss, and his boss puts on a $100 million options trade, you can go to prison for decades even if you didn't know anything about that trade. Some people think that's unfair and, inspired by recent drug-sentencing reform, are trying to fix it. (Via.) Good luck with that!?

Go Daimler!

"The Stuttgart-based car and truckmaker said about 100,000 German employees can now choose to have all their incoming emails automatically deleted," and that is surely the greatest perk any company has ever offered. Right now Daimler limits it to "when they are on holiday so they do not return to a bulging in-box," but a truly forward-looking company would remove that restriction and just delete everyone's e-mails always.

Things happen.

Cardiff Garcia and Matt Yglesias on Ferguson. What former FX trader Chris Arnade will miss about Brooklyn. The FX rigging investigations continue. Things with Argentina are about the same. Be polite. Banks' Social Media Strategies Take Time to Pay Off. Uber as HFT. Toddler résumés. Billion-Dollar Corporate Malfeasance Erotic Fan Fiction. Startup CEO Offers 1,284 Slides In The Most Insane PowerPoint Ever. Salmon cannon.

1 And not only because it quotes my post about the Allergan lawsuit against Pershing Square that quoted my previous post about Allergan and Pershing Square, though it does do that.

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.