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Opening Bell: 4.7.16

Yale scored 93% a year on venture capital in past two decades; Blackstone to close fund; Yellen says rate hikes on track; Macaulay Culkin says he’s ‘essentially retired’ from the acting world; and more.
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Yale Made 93% a Year on Venture Capital in Past Two Decades (Bloomberg)
Yale University’s original $2.7 million investment in LinkedIn Corp. produced $84.4 million in gains for the school’s endowment after the company went public in 2011. It’s one example of how venture capital helped propel performance at the second-richest U.S. college endowment of $25.6 billion. Venture capital earned an annual average of 93 percent over the past 20 years, according to the Ivy League school’s 2015 investment report posted on its website.

Yellen, alongside Fed alum, says rate hikes on track (Reuters)
The U.S. economy is on a solid course with some hints of inflation so the Federal Reserve is on track for further interest rate hikes, Federal Reserve Chair Janet Yellen said on Thursday in a defense of her decision to tighten policy late last year. In a rare spectacle, Yellen spoke on a New York panel alongside her three predecessors who ran the world's most powerful central bank. She said that, seven years after the brutal financial crisis, the U.S. labor market was now "close" to full strength, again arguing that inflation would not be held down much longer by the strong dollar and low oil prices.

Blackstone to Shut Mutual Fund After Fidelity Pulls Out (Bloomberg)
The Blackstone Alternative Multi-Manager Fund will no longer accept new money and will be liquidated by May 31, according to a filing with the U.S. Securities and Exchange Commission on Thursday. The fund’s investment adviser will seek to convert all of its holdings to cash and cash equivalents to meet anticipated redemption requests.

Investors stick with Pfizer CEO after Allergan deal scrapped (Reuters)
While failure on that scale often puts CEOs in jeopardy, 10 investors and portfolio managers told Reuters that Read still has their support. Read, they said, has a deep reservoir of goodwill after tackling many problems he inherited since taking over in 2010, including re-energizing Pfizer's faltering research and development operations. In addition, many of them blame the U.S. government, not Read, for the Allergan deal's demise.

‘American Psycho’ is leaving audiences a bloody mess (NYP)
Audiences at “American Psycho” complained about being splattered with (fake) blood, and the production’s taking precautions. A Schoenfeld Theatre manager sent a memo to staffers saying, “Last night, a patron came to me to complain about being hit by the stage blood. Not only was her sweater stained, but also her Burberry cashmere scarf and more importantly (she cried when she showed it to me) her leather Louis Vuitton bag. I told her that we will pay for the cleaning of her items.” The show’s implementing measures to avoid further carnage.

E.C.B. Rules Out Free Money as Antidote to Falling Prices (NYT)
“It’s not on the table,” Peter Praet, a member of the E.C.B.’s executive board, said of the helicopter idea, so named because of the image of showering money on the populace from the sky. “It’s not even discussed informally,” he said at the conference.

CEO Pay Shrank Most Since Financial Crisis (WSJ)
Median pay for the CEOs of nearly 300 large publicly traded companies slipped 3.8% to $10.8 million last year from $11.2 million in 2014, a Wall Street Journal analysis of compensation data from MyLogIQ found. Half of those CEOs saw total pay either decline or rise by less than 1%—also the worst showing for S&P 500 chiefs since the 2008 crisis.

Morgan Stanley Paints Bleak Outlook for Twitter on Few New Users (Bloomberg)
Morgan Stanley analysts came down hard on Twitter Inc., lowering their forecasts for the social media company’s stock price, on projected slower growth in new users, revenue and earnings. “Engagement and new user trends remain troubling,” the analysts, led by Brian Nowak, said in a note to clients Thursday.

Macaulay Culkin says he’s ‘essentially retired’ from the acting world (NYDN)
"I'm a man in his mid-30s who's essentially retired," the former child star said in a recent sit-down with Vulture. "I kind of go where the wind takes me a little bit." Culkin said he now spends most of his days writing, painting and "whatevering" while continuing to call NYC his home.

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Bond Trading Revives Banks (WSJ) Gains in the financial firms' fixed-income businesses, which can account for as much as half of revenue, are putting companies including Goldman Sachs Group Inc., Morgan Stanley and the J.P. Morgan unit of J.P. Morgan Chase & Co. on track to report their strongest numbers since the first quarter of 2011, said bankers and analysts. Trade Fight Flares on China Minerals (WSJ) The Obama administration Tuesday intends to escalate its trade offensive against China, a move heavy with political overtones, by pressing the World Trade Organization to force the export giant to ease its stranglehold on rare-earth minerals critical to high-tech manufacturing. The announcement, which will be made by President Barack Obama, marks a new front in the administration's election-year effort to turn up the heat on China, amid competition from the president's potential Republican rivals on the matter. It could also pressure China to respond to the WTO on an issue that is of high importance to a range of manufacturers. The U.S., joined by the European Union and Japan, plans to ask the WTO, the international arbiter of trade practices, to open talks with China over its restrictions on exporting the rare-earth minerals, administration officials said. New York City Tops Global Competitiveness, Economist Report Says (Bloomberg) New York City ranks first among 120 cities across the globe in attracting capital, businesses and tourists, according to an Economist Intelligence Unit report commissioned by Citigroup. London was the second most-competitive city, followed by Singapore, with Paris and Hong Kong tied for fourth place, according to the report, which was released today. Among U.S. cities, Washington, Chicago and Boston made the top 10. The report cited New York’s diverse economy, driven by media, arts, fashion, technology and finance. In 2010, New York was second only to California’s Silicon Valley as a source of venture capital in the U.S., according to the report. Ex-Lehman exec arrested again (Stamford Advocate) Bradley H. Jack, a former investment banking chief at Lehman Brothers and an owner of the most expensive residential property in Fairfield, has been charged for the second time in less than a year with forging a prescription for a controlled substance. Jack, 53, of North Avenue, was charged Friday by Westport police with second-degree forgery in connection with an incident last November when he is said to have forged the date of a prescription for a controlled substance at a CVS pharmacy that was made out to him by a Fairfield doctor. Euro-Zone Ministers Press Spain for a Deal on Deficits (WSJ) Euro-zone finance ministers on Monday pressed a budget plan on Spain—regarded as a key test of ambitious new rules for the currency bloc—that would allow the government some leeway on its budget deficit for this year but would keep a tough deficit target for 2013. The plan would mean Spain would still have to embark on a bruising austerity program over the next two years that would cut nearly 6% of gross domestic product off its deficit. The program would be particularly challenging given Spain's contracting economy and 23% unemployment rate, Europe's highest. Ministers said after the meeting that Spain had agreed to consider the proposal. Greek Students Fight Stray Dogs and Despair Amid College Cuts (Bloomberg) Higher education in Greece, as in much of Europe, has been battered by the recession and austerity measures. Budget cuts of 23 percent since 2009 mean buildings aren’t heated in the winter, schools have slashed faculty salaries and newly hired professors can wait more than a year to be appointed. Students say it’s hard to be hopeful with youth unemployment surpassing 50 percent and protesters seizing university buildings. “People are pessimistic and sad,” said Konstantinos Markou, a 19-year-old law student, speaking in a lobby at the University of Athens, where dogs fought nearby and students say drug dealers and users congregate. “The sadness is all around the air.” Entire Arena Football team cut during pregame meal at Olive Garden (YS) The owner of the Pittsburgh Power fired all 24 members of his team during a pregame meal at an Orlando-area Olive Garden. With AFL players set to strike before the 2012 season opener, owner Matt Shaner reacted first, cutting his entire team hours before kickoff of a game against the Orlando Predators. "Mid-statement, all the players got up and left," former Power center Beau Elliott told the Pittsburgh Tribune-Review. "Every player got up and left while he was still talking. There were 15 to 20 angry, large individuals." Tainted Libor Guessing Games Face Replacement by Verified Trades (Bloomberg) The London interbank offered rate, the benchmark for $360 trillion of securities, may not survive allegations of being corrupted unless it’s based on transactions among banks rather than guesswork about the cost of money. “The methodology used to formulate Libor is totally unsuitable for the modern world,” said Daniel Sheard, chief investment officer of asset manager GAM U.K. Ltd., which manages about $60 billion. “The British Bankers’ Association needs to come out on the front foot and say ‘this is a system that was appropriate 20 years ago but is no longer appropriate and we are going to change it.’” SEC set to file charges over private trading (FT) The Securities and Exchange Commission is close to filing civil charges tied to the trading of private stocks against at least three executives, making it the first case since regulators began reviewing secondary markets more than a year ago. The fresh scrutiny comes as Congress weighs laws to loosen restrictions on private trading, allowing private groups to have more shareholders and market their stock to a wider range of investors, to make it easier for start-up companies to raise capital and create jobs. It also comes just months ahead of an expected initial public offering for Facebook, which has been the most heavily traded private stock. Ruth Madoff Moves To Greenwich (Greenwich Time) While some Old Greenwich residents said they did not like the idea of Madoff taking up residence in the neighborhood, others shrugged off the news that Madoff was living in town. Neil Lucey, a semi-retired investment banker who has lived in Old Greenwich for 15 years, said he had "no adverse reaction" to hearing Madoff had moved in. Researchers say long-lost Leonardo may have been found (Reuters) Art researchers and scientists said on Monday that a high-tech project using tiny video probes has uncovered evidence that a fresco by Renaissance master Leonardo da Vinci lost for five centuries may still exist behind a wall of Florence's city hall...Researchers used tiny, medical-style endoscopic probes and other high-tech tools inserted through existing cracks in the outer wall holding the Vasari fresco and took samples of substances. "We found traces of pigments that appear to be those known to have been used exclusively by Leonardo," said Maurizio Seracini, an engineer and expert in art diagnostics who has been on the trail of the "Lost Leonardo" for three decades. "These data are very encouraging," he said, adding that one black pigment found was believed to be of the same type used by Leonardo on the Mona Lisa.

Opening Bell

Opening Bell: 05.14.12

JPMorgan Loss Claims Official Who Oversaw Trading Unit (NYTimes) The $2 billion trading loss at JPMorgan Chase will claim its first casualty among top officials at the bank as early as Monday, with chief executive Jamie Dimon set to accept the resignation of the executive who oversaw the trade, Ina R. Drew. Ms. Drew, a 55-year-old banker who has worked at the company for three decades and serves as chief investment officer, had repeatedly offered to resign since the scale of the loss became apparent in late April, but Mr. Dimon had held off until now on accepting it, several JPMorgan Chase executives said. Two traders who worked for Ms. Drew also planned to resign, JPMorgan Chase officials said. Her exit would mark a stunning fall from grace for one of the most powerful women on Wall Street, as well as a trusted lieutenant of Mr. Dimon...Former senior-level executives at JPMorgan said it was a shame that Ms. Drew has ended up suffering much of the fallout from the soured trade. They said that Thursday’s announcement of the $2 billion loss was the first real misstep that Ms. Drew has had and said that the position was not meant to drum up bigger profits for the bank, but rather to ensure that JPMorgan could continue to hold lending positions in Europe. “This is killing her,” a former JP Morgan executive said, adding “in banking there are very large knives.” Jamie Dimon: Trading Losses Are Not Life-Threatening (CNBC) “This is a stupid thing that we should never have done but we’re still going to earn a lot of money this quarter so it isn’t like the company is jeopardized,” he said in an interview with NBC’s “Meet with Press.” “We hurt ourselves and our credibility, yes — and that you’ve got to fully expect and pay the price for that.” Yahoo’s Thompson Out Amid Inquiry; Levinsohn Is Interim CEO (Bloomberg, earlier) Thompson, 54, was brought on to orchestrate a turnaround after Google Inc. and Facebook Inc. lured users and advertising dollars. Thompson’s undoing stems from erroneous biographical references to him as holding a bachelor’s degree in computer science from Stonehill College. A former EBay Inc. (EBAY) executive, he earned a degree in accounting from the Easton, Massachusetts- based school, and the information is correctly listed in EBay regulatory filings and some Yahoo press releases. The incorrect degree showed up in Yahoo’s April 27 10-K filing, as well as on the company’s website. As part of the board changes, Daniel Loeb, chief executive officer of Third Point, joins as a director along with Harry Wilson and Michael Wolf. A fourth nominee, Jeffrey Zucker, said in today’s statement that he withdrew his nomination to allow a quick transition. Euro Officials Begin to Weigh Greek Exit (Bloomberg) Greek withdrawal “is not necessarily fatal, but it is not attractive,” European Central Bank Governing Council member Patrick Honohan said in Tallinn on May 12. An exit was “technically” possible yet would damage the euro, he said. German Finance Minister Wolfgang Schaeuble reiterated in an interview in Sueddeutsche Zeitung that member states seeking to hold the line on austerity for Greece could not force the country to stay. LightSquared Moves Toward Bankruptcy Filing (WSJ) Hedge-fund manager Philip Falcone's LightSquared Inc. venture was preparing Sunday to file for bankruptcy protection after negotiations with lenders to avoid a potential debt default faltered, said people familiar with the matter. LightSquared and its lenders still have until 5 p.m. Monday to reach a deal that would keep the wireless-networking company out of bankruptcy court, and there were some indications over the weekend that a final decision hadn't yet been reached on its fate. Still, the two sides remained far apart, and people involved in the negotiations expected LightSquared to begin making bankruptcy preparations in earnest. Facebook cofounder living large in Singapore as he stiffs US for a possible $600M in taxes (NYP) Saverin is renouncing his US citizenship in favor of Singapore, the Southeast Asian city-state that has no capital-gains tax, where he has lived like royalty since 2009. The move already has saved him about $288 million in taxes, and will save him much more if he chooses to sell his $4 billion personal stake in Facebook, which goes public next week. “This pisses me off,” fellow tech-industry billionaire Mark Cuban spat on Twitter Friday upon hearing news of Saverin’s decision. Saverin’s spokesman has defended the move, claiming he has investments in the Far East, and Europe and the permanent move makes perfect sense. “Eduardo recently found it more practical to become a resident of Singapore since he plans to live there for an indefinite period of time,” Saverin’s spokesman told Bloomberg. JPMorgan Unit's London Staff May Go as Loss Prompts Exits (Bloomberg) The entire London staff of JPMorgan Chase’s chief investment office is at risk of dismissal as a $2 billion trading loss prompts the first executive departures as soon as this week, a person familiar with the situation said. The firm is examining whether anyone in the unit, which employs a few dozen people in London, sought to hide risks, said the person, who requested anonymity because the deliberations are private. In Wake Of JPMorgan Loss, Rivals Fret About New Rules, Downgrades (WSJ) Over the weekend, rival banks scurried to explain why they believe a similar trading loss couldn't happen at their firm. Some companies pointed to moves already taken to reduce risk and sell off volatile and opaque assets such as derivatives on credit indexes. In a statement, Citigroup "has a small amount of straight-forward economic hedges managed at the corporate center to mitigate our credit exposure, principally relating to consumer loans." About half of that total is in cash, with most of the rest in U.S. Treasury bonds and other conservative investments. At Morgan Stanley, the portfolio most similar to J.P. Morgan's investment office is a $32 billion "available for sale" portfolio. The portfolio primarily consists of easily traded U.S. Treasury and government agency securities. It doesn't hold any derivatives instruments, a person familiar with Morgan Stanley's operations said. Goldman Sachs has no similar unit to the one at J.P. Morgan that suffered the loss. Apple Founder Wozniak to Buy Facebook Regardless of Price (Bloomberg) “I would invest in Facebook,” he said in an interview yesterday on Bloomberg Television. “I don’t care what the opening price is.” Missing: Stats on Crisis Convictions (WSJ) It is a question that has been asked time and again since the financial crisis: How many executives have been convicted of criminal wrongdoing related to the tumultuous events of 2008-2009? The Justice Department doesn't know the answer. That is because the department doesn't keep count of the numbers of board-level prosecutions. In a response earlier this month to a March request from Sen. Charles Grassley (R.,Iowa), the Justice Department said it doesn't hold information on defendants' business titles. "Consequently, we are unable to generate the [requested] comprehensive list" of Wall Street convictions stemming from the 2008 meltdown, the letter from the Department of Justice to Mr. Grassley said. Man Charged in Death Offers Victim's Foot for Deal (AP) A homeless man charged with killing and dismembering his friend says he can't remember much about the crime. But in a jailhouse interview, Leslie Sandoval told the Anderson Independent-Mail he remembers where he put the victim's missing left foot and is willing to tell a prosecutor if she will make him a deal. Sandoval says he went on a January drinking binge with Seth Foster. Foster's torso was found under an Anderson home, and his head, hands and right foot were found different places. Sandoval says he is confused about exactly what happened. But he disagrees with a coroner's finding he beat Foster and denies a claim from investigators that he confessed and gave them the knife used to dismember Foster.