Big Funds Undecided On Dimon (WSJ)
J.P. Morgan Chase & Co. has yet to persuade three of its largest shareholders to back the company in a coming vote over whether James Dimon should retain his dual role of chairman and chief executive. BlackRock Inc., Vanguard Group Inc. and Fidelity Investments remain undecided with two weeks to go before final votes are tallied on May 21, said people close to the firms. ... All three money managers have sided with J.P. Morgan Chase management in shareholder votes in the past. Last year, BlackRock, the largest institutional investor, with 248 million shares across its funds, voted against a similar proposal, as did Fidelity and Vanguard.
Paulson Bid to Resurrect Reputation Hurt by Gold Gone Bad (Bloomberg)
On a conference call with investors last month, billionaire John Paulson boasted that one of his biggest hedge funds would have been up 15 percent this year -- if only he hadn’t owned gold stocks.
A Humbled Kleiner Perkins Adjusts Its Strategy (DealBook)
Kleiner has held a series of status-report meetings with its outside investors this year, acknowledging that recent fund performance “wasn’t great,” one attendee said. “They really believed green tech was going to be the next big technology wave,” this investor added. Kleiner has also cut some management fees and reorganized its investment approach, eliminating three “silos” that separated teams making investments in clean technology, health care and technology. The firm has added more investing partners with digital expertise, like the former Twitter executive Mike Abbott, after it missed the early window on hot media start-ups like Facebook and Twitter and jumped in later at higher valuations.
Hedge funds in search of distress take a look at Detroit (Reuters)
With $8.6 billion in long-term debt, Detroit would be comparable to the biggest corporate failures if it eventually files for bankruptcy, a major advantage for big hedge funds that are used to investing hundreds of millions of dollars at a time. The sheer size of Detroit's debt should make it easier for the funds to track down very large chunks of bonds, magnifying their profit potential, cutting their research and advisory costs and giving them leverage when it comes to restructuring talks.
Hedge Funds Rush Into Debt Trading With $108 Billion (Bloomberg)
Hedge funds using debt-trading strategies honed on Wall Street are expanding at a record pace as they profit from risks big banks are no longer taking. ... “The regulatory posture in the U.S. and in Europe is unequivocal: They want to transfer risk to the shadow-banking system,” said Roy Smith, a finance professor at New York University’s Stern School of Business and former Goldman Sachs Group Inc. partner. “It does come at the cost of interfering with some financial capabilities of the large banks to function as market makers and arbitrage providers.”
Man returning homemade pipe bomb gets arrested at L.A. gun buyback event (CBS)
Police arrested a man attempting to turn in a homemade pipe bomb during the latest Los Angeles gun buyback event, CBS Los Angeles reports. According to Police Chief Charlie Beck, the man told authorities he was prompted to turn in the device after a conversation with God. The man said "God no longer wanted him to use that bomb to blow up the Hollywood sign, now he wanted him to turn it in," Beck told CBS Los Angeles.
Fed's credibility tested as inflation drifts below target (Reuters)
"They say that they're going to set monetary policy in a way that ensures future inflation will be 2.0 percent," said Justin Wolfers, an economics professor at the University of Michigan's Gerald Ford School of Public Policy. "Right now, they expect it to be lower than that, and unemployment to be unconscionably high, so the Fed's own framework says that they need to take more stimulative action." ... "I'm very willing to defend the inflation target from the low side. If we say 2.0 percent, we should hit 2.0 percent," St. Louis Federal Reserve Bank President James Bullard told reporters last month.
Americans Are Borrowing Again but Still Less Than Before Freeze (WSJ)
In all, some $713 billion in credit flowed to U.S. households and nonfinancial businesses last year, double 2011's $336 billion, according to the Fed. That is still a fraction of the $2.2 trillion in credit that lifted American consumers and businesses in 2007.
White Makes Case for Bigger S.E.C. Budget (DealBook)
Under President Obama’s budget plan, the S.E.C. is seeking $1.67 billion for the 2014 fiscal year, a roughly 26 percent uptick from the current level. “The S.E.C.’s current level of resources still presents significant challenges as we seek to keep pace with the growing size and complexity of the securities markets and fulfill our broad mandates and responsibilities,” Ms. White said in written testimony to the Senate subcommittee. ... Under the new budget plan, the S.E.C. would try to add 676 staff members, including 131 for the enforcement division that polices financial fraud.
Brazilian diplomat Roberto Azevêdo wins WTO leadership battle (FT)
Brazil’s Roberto Azevêdo has emerged as the new director-general of the World Trade Organisation after seeing off Herminio Blanco of Mexico, the favoured candidate of the US and EU, according to officials familiar with the contest. ... Mr Azevêdo faces a major challenge to restore the credibility of an organisation that has failed to conclude the Doha round of global trade negotiations.
Sir Alex Ferguson retires as Manchester United manager after 27 years (Guardian)
It is understood that any successor to the Scot would be required by the club to have extended experience of managing in the Champions League, as well as expertise in handling a large budget and squad. These criteria would appear to rule out David Moyes, the Everton manager, with at least one senior executive unsure about his candidacy, despite Ferguson being an admirer – though earlier in the week bookmakers slashed the odds on him joining United, possibly as member of the backroom staff, this summer. Other managers who may be of interest to United would include Real Madrid's José Mourinho, though he appears favourite to take over at Chelsea, Jurgen Klopp, whose Borussia Dortmund team are in the Champions League final, and Malaga's Manuel Pellegrini. Ferguson will be a strong voice in any replacement for him and whether he would endorse Mourhino is unclear. When Charlton, a United director and one of those instrumental in bringing Ferguson to the club from Aberdeen in 1986, was asked last year if the Scot admired the Portuguese, he said: "He doesn't like him too much, though."
One More Field Where the Continent Trails Germany (NYT)
Germany, Europe’s largest economy, is viewed not only with resentment but with a mixture of apprehension, envy and admiration, informed by a belief that the Germans have cracked the code of how to compete in the globalized world, coupled with an uncertainty about whether their efficient, export-driven economic model can be replicated. Much the same is true currently with soccer.
Heavy metal singer Tim Lambesis arrested in murder-for-hire plot (Reuters)
Tim Lambesis, lead singer for the heavy metal band As I Lay Dying, was arrested in California on Tuesday on charges that he sought the help of an undercover detective to have his estranged wife killed, police said. ... The band's 2007 album "An Ocean Between Us" debuted at number 8 on the Billboard 200 list, and ranks as one of their top-selling releases. Last year, As I Lay Dying put out its sixth album "Awakened." As I Lay Dying has at times been described in the media as a Christian group, but Lambesis said this year in an interview with heavy metal website Noisecreep that group members wanted "to be judged on the music" rather than their "personal beliefs."