For States, a Glimmer of Hope on Deficits (NYT)
From stronger-than-expected tax collections in deficit-ridden California to projected surpluses in struggling states like Michigan and Pennsylvania, a growing number of recession-weary states are finally announcing a bit of good budget news for the first time since the downturn began. But it would probably be premature to pop the Champagne, or even the prosecco — or to otherwise declare the fiscal crisis that has hammered states to be over.

Howard Marks’ Oaktree Capital sows seeds for listing on NYSE (FT)
Oaktree Capital Management is planning to list its shares on the New York Stock Exchange in a deal that would value the asset manager at between $8bn and $9bn, people familiar with the matter said. Oaktree, which manages $85bn, mostly in debt investments, listed shares four years ago on a quasi-public exchange set up by Goldman Sachs.

DSK Accuser Is ‘Afraid,’ ‘Overwhelmed’ (WSJ)
Investigators swabbed a sink and removed a section of carpet from the hotel suite where International Monetary Fund chief Dominique Strauss-Kahn allegedly assaulted a hotel housekeeper, a New York law-enforcement official said Tuesday, as a clearer profile began to emerge of the alleged victim. Her attorney [Jeffrey Shapiro] characterized her as a “simple woman, with little education” who is a single mother from Guinea. Mr. Shapiro said his client, a 32-year-old widowed mother of a 15-year-old girl, was granted asylum in the United States seven years ago from her native country of Guinea.

Fed seeks annual US bank stress tests (FT)
The Federal Reserve wants to subject US banks to annual capital tests, reserving the right to veto dividend pay-outs if they do not pass.

‘Gang of Six’ on verge of collapse as Republican Sen. Coburn withdraws (WaPo)
Since January, six senators have engaged in difficult negotiations and made painful concessions in a politically dangerous quest for something that has long eluded Washington: a bipartisan compromise to control the nation’s mounting debt. By Tuesday evening, however, the “Gang of Six” was on the verge of collapse. Sen. Tom Coburn (R-Okla.) withdrew from the bipartisan working group, saying the senators simply could not overcome the polarizing political pressure that each faces. Continue reading »

$$$ In Europe, a first call for IMF chief Strauss-Kahn to quit (WaPo)

$$$ This is what Ben Stein had to say about the Dominique Strauss-Kahn situation: “The prosecutors say that Mr. Strauss-Kahn “forced” the complainant to have oral and other sex with him. How? Did he have a gun? Did he have a knife? He’s a short fat old man. They were in a hotel with people passing by the room constantly, if it’s anything like the many hotels I am in. How did he intimidate her in that situation? And if he was so intimidating, why did she immediately feel un-intimidated enough to alert the authorities as to her story?” (American Spectator)

$$$ A Once-Tight Flock at Goldman, Now Scattered [Dealbook]

$$$ Skepticism grows on Geithner’s debt limit deadline (Reuters)

$$$ Iran president may become OPEC president (MarketWatch)

$$$ Fund managers losing faith in world economy (FT)

$$$ Hedge Funds Line Up for AIG Pitch Meeting (CNBC)

$$$ LinkedIn IPO: Biggest Price Bump Since Tech Bubble (Deal Journal)

$$$ Goldman’s Hatzius: The Next US Recession ‘Is Years Away‘ (CNBC)

$$$ Barclays Pays Its Top Staff 7% Interest on Five-Year Deferred Cash Bonuses (Bloomberg)

$$$ Dennis Berman: The Midwest Medicis’ Favorite Financier [WSJ]

$$$ A colour-coded guide to the Greek crisis (BofA/ML via FT Alphaville) Continue reading »

IMF chief claims consent in hotel ‘attack’ (NY Post)
“The evidence, we believe, will not be consistent with a forcible encounter,” said Ben Brafman, the high-powered lawyer of IMF chief Dominique Strauss-Kahn, at the suspect’s sensational arraignment in a packed criminal courtroom. A source close to the defense later told The Post, “There may well have been consent.”

New York Investigates Banks’ Role in Fiscal Crisis (NYT)
The New York attorney general has requested information and documents in recent weeks from three major Wall Street banks about their mortgage securities operations during the credit boom, indicating the existence of a new investigation into practices that contributed to billions in mortgage losses. Officials in Eric T. Schneiderman’s, office have also requested meetings with representatives from Bank of America, Goldman Sachs and Morgan Stanley, according to people briefed on the matter who were not authorized to speak publicly.

How Big Investors Are Betting (WSJ)
Mr. Cohen, whose SAC Capital reported a 9.3% increase in securities holdings in the quarter ended March 31, increased a stake in consumer electronics retailer Best Buy Co. to 2.3 million shares from 53,306 at the end of the previous quarter. SAC also more than doubled its stake in BJ’s Wholesale Club Inc. to 2.8 million shares from 1.1 million.

John Paulson Loves Hewlett-Packard (Deal Journal)
The $5 Billion Man, hedge fund manager John Paulson, reported plowing $1 billion into Hewlett-Packard, pared his stake in Citigroup and is standing pat with his big investment in a gold ETF…Paulson & Co. also disclosed owning 123.6 million shares of Bank of America, down by 226,522 from the end of 2010. And one interesting new holding showing up on Paulson’s radar: Lubrizol.

Soros Fund Cuts Gold, BofA, J.P. Morgan Stakes; Adds to Citi, Wells (Deal Journal)
Soros decreased his holdings of the SPDR Gold Trust, a gold-backed exchanged-traded fund, by 4.7 million shares to 49,400 shares, valued at $6.9 million at March 31…The fund lowered its Bank of America holding by 1.2 million shares and now owns 29,400 shares. Soros sold 378,050 shares of J.P. Morgan, leaving him with 624,600 shares. In contrast, his firm tripled its stake in Citigroup to 29.4 million shares. Soros’ stake in Wells Fargo climbed six-fold to 3.5 million shares.

Bill Ackman Throws in the Towel on Target (Deal Journal)
Pershing Square reported owning 7.4 million Target shares as of Dec. 31, but there is no whisper of the Target investment in Pershing’s latest snapshot of its stock holdings as of March 31.

David Einhorn Buys…General Motors (DJ)
David Einhorn’s Greenlight Capital investment fund reported new ownership stakes in two newly public companies, hospital operator HCA Holdings and General Motors, a.k.a. Government Motors.

Falcone’s Harbinger Holdings Adds Bunge Shares, Trims Gold Stake (Bloomberg)
Harbinger Holdings LLC, the hedge fund run by Philip Falcone, bought shares of food company Bunge Ltd. (BG) in the first quarter and sold shares of SPDR Gold Trust, according to a regulatory filing.

Schwarzenegger fathered a child with longtime member of household staff (LA Times)
Former California Gov. Arnold Schwarzenegger and his wife, Maria Shriver, separated after she learned he had fathered a child more than a decade ago — before his first run for office — with a longtime member of their household staff. Continue reading »