Fallout From High-Frequency Trading Hits Brokerages (WSJ)
Shares of E*Trade Financial Corp., Charles Schwab Corp. and TD Ameritrade Holding Corp. tumbled last week amid concerns that regulators would ban a practice that allows brokerages to collect hundreds of millions of dollars a year in revenue by selling orders to middlemen who use high-frequency strategies to trade with the brokers’ customers.
Pimco’s problems grow as pension funds take fright (FT)
One of the first investors in Pimco’s $232 billion Total Return fund has begun looking for an alternative fixed income manager as concerns over the world’s biggest bond house escalate. The Orange County Employees Retirement System, situated just 12 miles from Pimco’s headquarters in California, has instructed an investment consultant to search for an “additional” domestic fixed income portfolio manager. The $11.5 billion pension scheme has invested in Pimco chief executive Bill Gross’s Total Return strategy since 1982, but it has put the fund on watch due to “organisational and personnel issues” at the company.
BlackRock Reshuffles Management (WSJ)
BlackRock Inc. took a big step toward picking a successor to co-founder and Chief Executive Laurence D. Fink on Sunday, announcing a reshuffling of the management ranks that will elevate a number of executives to prominent roles at the world’s largest asset-management firm. In a call with employees Sunday afternoon, Mr. Fink and President Robert Kapito stressed that Mr. Fink, 61 years old, would remain with the firm for years to come. But the New York firm laid out its most sweeping managerial overhaul in years. Among other moves, it added a new co-president and tapped a new chief operating officer, while promoting a number of other executives, including its company heads in Asia and New York. Mr. Kapito, 57, long has been seen as the heir apparent to Mr. Fink, and the moves are seen as strengthening that position, according to people at the company. He has been president of the firm since 2007…Among the biggest moves, the firm promoted Charlie Hallac, the New York-based company’s chief operating officer, to the new position of co-president alongside Mr. Kapito, who will remain in that role.
The Best Dirt From 15 Central Park West (NYM)
Billionaires Carl Icahn and Daniel Loeb allegedly tussled over a $45 million apartment; Loeb won by not blinking at the astronomical price. Icahn supposedly offered half the asking, a story he dismisses, saying he only wanted one of two units that could be combined: “There was no hondling,” Icahn is quoted in the book. “Bullshit.” (“Page Six” reports that Loeb was upset that Gross and his book are being feted at the building via a party hosted by political cartoonist and resident Ranan Lurie and his wife, Tamar; it’s still scheduled to take place as of this writing.)
Legendary Man U coach headed to Harvard Business School (NYP)
Alex Ferguson, the legendary British soccer manager for Manchester United who is famous for his volcanic temper, is bringing his coaching techniques to Harvard Business School. Ferguson, who retired from managing ManU last year, will teach in Harvard’s executive-education program, the school said this week. Ferguson, 72, is the most successful manager in British soccer and was knighted in 1999.
Australian groom banned from getting married after showing up drunk (NYDN)
Jake Francis Brookes, 41, was reportedly still drunk from his bachelor party when he rocked up at Exeter Uniting Church in Adelaide in February. Witnesses said he was swaying, bruised and sporting torn clothes. It led Reverend Ian Hunter to refuse to proceed with the ceremony because it was “unethical.” This resulted in a “minor altercation” between Brookes and Hunter – which ended after cops were called, according to the Adelaide Advertiser. Brookes was then arrested and charged with disorderly behaviour and resisting arrest – while his wife-to-be decided to cut her losses and end the relationship. He appeared in Port Adelaide Magistrates Court for a preliminary hearing on Thursday. Afterwards, he told reporters outside: “I miss her to bits – she is always in my heart.” “She wants me to be the best I can possibly be…I had my bucks night the night before bro, I mean come on, we are all men here,” he added.
Credit Suisse Is Said to Be Facing Double-Barreled Inquiries (Dealbook)
The biggest danger to Credit Suisse, suspected of sheltering billions of dollars for American clients who evaded taxes, comes from federal prosecutors. While the Justice Department has considered a so-called deferred-prosecution agreement that would suspend any indictment in exchange for a large cash penalty and other concessions, it is also pushing for a guilty plea from a Credit Suisse subsidiary, people briefed on the case said, a punishment in some ways harsher that banks generally avoid in all but the gravest cases. The cash penalty, the people said, is expected to exceed the $780 million that Switzerland’s largest bank, UBS, paid to resolve a similar case in 2009.
More Investors Are Drawn to Dividends (WSJ)
The shift from last year, when so-called growth stocks were in favor, reflects rising concern that corporate earnings are running out of gas and the economic recovery will be stuck in low gear. Few investors expect the market to deliver the gains seen last year, when the S&P 500 returned 32% including dividends.
Singapore Urges Companies to Exploit China Consumer Boom (Bloomberg)
Singapore is encouraging companies to expand in China to tap rising consumption in the world’s second-largest economy as President Xi Jinping sustains efforts to reduce his country’s reliance on investment and exports.
Hedge Funds Get Gold Timing Wrong on Rebound (Bloomberg)
Hedge funds and other speculators misjudged gold prices for a second time in three weeks. Just after the investors sold bullion holdings for a second consecutive week, a disappointing U.S. jobs report sparked the biggest rally in prices since mid-March. Their funds fared better in the five preceding weeks, correctly adjusting wagers 80 percent of the time.
George W. Bush: Vladimir Putin ‘dissed’ Barney the dog (Politico)
Former President George W. Bush [unveiled] a new painting exhibit Saturday that features some of his renderings of the world leaders he worked with during his time in office, including Russian President Vladimir Putin. “Vladimir Putin, yeah, I met with him a lot during the presidency,” Bush said as he described the painting during an interview with his daughter, Jenna Bush Hager, for NBC’s “Today” show. “I got to know him very well. I had a good relationship throughout, it became more tense as time went on.” Previewing the never-before-seen works, including by the leaders depicted themselves, Bush said the paintings reflect his relationships with the leaders. “Vladimir’s a person who in many ways views the U.S. as an enemy,” Bush said. “And although he wouldn’t say that, I felt that he viewed the world as either the U.S. benefits and Russia loses or vice-versa. I tried of course to dispel him of that notion.” Bush said he learned some of Putin’s character when he introduced the Russian leader to another one of his favorite painting subjects: his dog Barney. “Our dear dog Barney, who has a special spot in my heart. I introduced him to Putin: Putin kind of dissed him,” Bush told his daughter. “‘You call that a dog?’ A year later, your mom and I go to visit Vladimir at his Dacha outside of Moscow and he says, ‘Would you like to meet my dog?’ Out bounds this huge hound, obviously much bigger than a Scottish Terrier. And Putin looks at me and says, ‘Bigger, stronger and faster than Barney.’” The 43rd president said the encounter gave him plenty of inspiration for the Putin portrait. “I took it in. I didn’t react,” Bush said. “I said, ‘Wow, anybody who thinks “my dog is bigger than your dog” is an interesting character.’ And the painting kind of reflects that.”