Opening Bell: 1.5.15


Hedge funder who wanted fewer breadsticks won against Darden (NYP)
Starboard Value was a little-known $3 billion hedge fund run by 42-year-old Jeff Smith when it moved on Darden Restaurants in December 2013, taking a 5.6 percent stake. Smith, following activist Barington Capital, realized that the company needed a drastic overhaul as its family restaurants Red Lobster and Olive Garden had not bounced back from the recession. But instead of listening to the activists’ detailed arguments, Darden decided its solution was to spin off Red Lobster. That infuriated shareholders, who had jumped through hoops to demand a special meeting to vote against the plan. By the time it was all over, Darden’s chairman and CEO, Clarence Otis Jr., had resigned, eight directors agreed to quit, and the rest were thrown out in a boardroom coup during an October proxy battle...Smith, who gained notoriety by suggesting Olive Garden cut back on the free breadsticks and begin to salt its pasta water, is now chairman of the board.

Chaos Rules at Russian Hedge Fund as Boss Vanishes (WSJ)
Blackfield Capital CJSC was one of Moscow’s hottest hedge funds, hosting glitzy parties and embarking on ambitious plans to expand to the U.S. The firm’s founder in 2013 even rented a Manhattan apartment for a record-setting price, according to a real-estate broker, and instructed his U.S. staff to buy a $300,000 sports car. Now, the founder is missing, allegedly along with all of the firm’s assets, according to former employees, in an international mystery that has captivated Moscow’s investment community. The firm’s employees didn’t know anything was amiss until mid-October, when three men charged into Blackfield’s offices in an upscale complex along the Moscow River in central Moscow, said people who were there. The men, who didn’t identify themselves, said they were looking for Blackfield’s 29-year-old founder, Kim Karapetyan, according to the people who were there. But Mr. Karapetyan wasn’t in the office that day or the next, when senior executives explained to the staff of about 50 that there was no longer any money to pay their salaries, said one former senior executive and ex-employees. The executives disclosed that all the money in the company accounts—some $20 million, including investor cash—was also missing, they said. It couldn’t be determined whether investors were from Russia or other countries.

Wall Street Strategists Forecast More Stock Gains in 2015 (WSJ)
...many strategists say any rate increase should be viewed as an endorsement of the U.S. economy’s ability to withstand higher borrowing costs. Wall Street strategists see the S&P 500 rising 8.2% this year, based on the average forecast of banks and money-management firms polled by research firm Birinyi Associates. Accelerating economic expansion in the U.S. and strong corporate-earnings growth will continue to power the rally, they say.

Oil Below $60 Tests U.S. Drive for Energy Independence (Bloomberg)
The U.S. shale boom that’s brought the country closer to energy self-sufficiency than at any time since the 1980s will be challenged in 2015 as never before. The benchmark U.S. crude price has fallen below $60, demand growth is weakening and OPEC, which controls 40 percent of supply, is unwilling to cut output. “The extent and rapidity of the price decline has been a surprise,” said Andy Lipow, president of Lipow Oil Associates LLC, an energy consultant in Houston. “They’re facing a new reality.”

Naked woman gets stuck in ex-boyfriend’s chimney (NYP)
Tony Hernandez, got the rude awakening around 5 a.m. Saturday when the 35-year-old mother of his children, whose name has not been released, attempted to get inside his house, CBS Los Angeles reports. When the woman showed up and got no answer at the front door, she decided to take off all her clothes, make her way up to the 12-by-12 inch chimney — and then shimmy down making a Santa-style entrance. Things took a turn for the worse when the ex-lover got herself stuck just as Hernandez was getting up for work. He discovered the woman after hearing her cries for help. “I’m trapped in the chimney,” he could hear his ex shouting. Hernandez went up to the roof and tried to free her to no avail, according to CBS. He eventually said enough is enough and called 911. The Riverside County Fire Department showed up and finally freed Hernandez’ estranged girlfriend after a two-hour operation that involved busting the fireplace open.

Piketty Says Gates Loves His Book While Disagreeing on Tax Plan (Bloomberg)
Thomas Piketty, the French economist whose best-selling book has added tinder to the debate on income inequality, counts the world’s richest person among his fans. “I had this discussion with Bill Gates a couple of weeks ago,” Piketty, the author of “Capital in the Twenty-First Century,” said today at an economics conference in Boston. “He told me, ‘I love everything that’s in your book, but I don’t want to pay more tax.” A tax on wealth is one of Piketty’s key recommendations for addressing inequality. “I understand his point,” said Piketty, 43, who teaches at the Paris School of Economics. “I think he sincerely believes he’s more efficient than the government, and you know, maybe he is sometimes.”

Pimco Total Return Has Worst Year of Redemptions Ever (Bloomberg)
Investors pulled $19.4 billion from Pimco Total Return Fund (PTTRX) in December, bringing redemptions in 2014 to a record $105 billion, according to data compiled by Bloomberg using information from Newport Beach, California-based Pimco and Morningstar Inc. Assets in the world’s biggest bond fund fell to $143.4 billion as of Dec. 31, according to a Jan. 2 statement from Pimco, down by more than half from a peak of $293 billion in April 2013.

CFPB Sets Sights on Payday Loans (WSJ)
U.S. officials are taking their first crack at writing rules for payday loans, responding to concerns that the short-term, high-rate debt can trap consumers in a cycle of borrowing they can’t afford. The Consumer Financial Protection Bureau is exploring ways to require payday lenders to make sure customers can pay back their loans, according to people familiar with the matter. The bureau is seeking to establish the first federal regulations for the $46 billion industry, which has historically been overseen by states.

Germany's Gabriel says Berlin wants Greece to stay in euro zone (Reuters)
The German government wants Greece to stay in the euro zone and there are no contingency plans to the contrary, Vice Chancellor Sigmar Gabriel said on Sunday, responding to a media report that Berlin believes the currency union could cope without Greece. Gabriel, the Economy Minister and leader of the center-left Social Democrats (SPD), also told the Hannoversche Allgemeine Zeitung that the euro zone had become more resilient in recent years and could not be "blackmailed". "The goal of the German government, the European Union and even the government in Athens itself is to keep Greece in the euro zone," Gabriel said in the interview to appear on Monday.

Woman cited for mailing cow poop to neighbors (UPI)
Burlington police said Kimberly Capdevila, 51, sent the smelly package to neighbors Steve Rowland and Mary Eipert through website after the neighbors repeatedly complained to police about Capdevila's dog barking during the past three years. "On Dec. 13, Rowland received a package in the mail from," Des Moines County District Associate Court documents state. "Inside the package was a substance that was identified as animal feces. On Dec. 29, (officers) spoke with Kimberly Capdevila, who stated she had the package sent to the Rowlands because of the ongoing problems between the two families." Police said, which offers deliveries of cow, elephant and gorilla poop through the United States Postal Service, did not break the law by filling Capdevila's order. The website says customers "may not use our service to threaten, constitute harassment, violate a legal restraint, or any other unlawful purpose. The customer agrees this is a gag gift, novelty service for entertainment only, and that is their only intention." Capdevila was cited for third-degree harassment and is due in court Jan. 6. The suspect told Burlington newspaper The Hawk Eye she did not intend for her neighbors to be offended by the package. "In no way, shape or form did I intend this to be anything more than a practical joke," she said. "I was given a website that I thought was anonymous. I thought it would be a funny thing to do to send it to my neighbors. "After all the problems we've had, I thought it would be a funny thing to do. I am sorry if they took offense to it. If they took offense, I apologize. I never intended to harass them. I look forward to having my day in court."


Opening Bell: 1.25.16

Sophisticated institutional investors driving selling; Lagarde has second IMF term in the bag; "The Bronx Zoo will let you name a Madagascar hissing cockroach after your Valentine"; and more.

Opening Bell: 5.7.15

Billions in FX settlements coming; Dan Loeb rips Warren Buffett; Lagarde comes down on banker pay; UBS bankers turned restauranteurs; "Naked Man Threatens Neighbors With AK-47"; and more.


Opening Bell: 8.15.17

Lloyd has 140 characters or so for Donald Trump; Jana looking to pull a Whole Foods with Blue Apron; Malcolm Gladwell takes contrarian stance on inane topic; and more.