Strauss-Kahn Awaits Arraignment in Sex Assault Case (Bloomberg)
International Monetary Fund chief Dominique Strauss-Kahn awaits his first court appearance on attempted rape charges after giving police permission to examine him for physical evidence of scratches and DNA from his accuser. The alleged attack on a 32-year-old female maid at a Sofitel hotel in midtown Manhattan occurred May 14, according to the New York Police Department. Strauss-Kahn, who was taken into custody aboard an Air France flight at John F. Kennedy International Airport as it prepared to depart, also was charged with unlawful imprisonment and a criminal sex act. He remains in custody until an 11 a.m. hearing in Manhattan criminal court. Strauss- Kahn, 62, has denied the charges and will plead not guilty, his lawyer Benjamin Brafman said. The IMF chief was picked out of a lineup yesterday by the maid, police said. His arraignment, during which bail terms may be set, had been scheduled for yesterday and was delayed after investigators sought a warrant a physical examination of Strauss-Kahn.

I.M.F. Names New Leader (NYT)
Hours after its chief, Dominique Strauss-Kahn, was arrested in connection with the alleged sexual attack of a maid at a Midtown Manhattan hotel, the International Monetary Fund on Sunday named John Lipsky as acting managing director. Mr. Lipsky, the I.M.F.’s first deputy managing director, is a former U.S. Treasury executive and onetime banker at JP Morgan.

Why Lagarde Will Be The Next IMF Managing Director
Felix Salmon: “Christine Lagarde will become the first female managing director of the IMF. She has the political skills and the economic credentials to get the job, and Europe will feel much more comfortable with a European in the role over the next few turbulent years. The US won’t object, and the Asians will go along with the choice since they don’t really have a candidate of their own.”

New Details in IMF Sex Case (WSJ)
According to the narrative [the accuser] gave investigators, Mr. Strauss-Kahn emerged from the bathroom nude and approached her from behind and touched her breast, then threw her on to the bed, the official said. She told police she broke free but was then pushed into a rear hallway of the suite near the bathroom. Mr. Strauss-Kahn allegedly caught up with her and sexually assaulted her, the official said, before allowing her to leave.

IMF head finally agrees to medical exam; set for arraignment today (NYP)
In an ironic twist, Strauss-Kahn may have inadvertently helped cops capture him before he fled the country. After the alleged assault Saturday, Strauss-Kahn was so desperate to flee that he left his cellphone in the hotel room, officials said. He also gave away his location, calling the hotel to tell management that he had left behind his phone and that he was at JFK Airport. So when the incident was reported and cops went looking for Strauss-Kahn, the hotel was able to direct authorities to the airport, where he was pulled off a plane just before it departed for Paris at 4:40 p.m.

Police Seek Evidence From I.M.F. Chief on Sex Attack (NYT)
The authorities said they had moved to obtain a court order granting them a search warrant to examine Mr. Strauss-Kahn for signs of injury that he might have suffered during a struggle or for traces of his accuser’s DNA. “Things like getting things from under the fingernails,” a law enforcement official explained, “the classic things you get in association with a sex assault.”

Strauss-Kahn Arrest Bolsters Push for IMF Changes (Bloomberg)
“This event is likely to put into play the leadership and governance structure of the IMF in a dramatic and unanticipated manner,” said Prasad, a former IMF official.

Soul-Searching in France After Official’s Arrest Jolts Nation (NYT)
Some, including Mr. Strauss-Kahn’s wife, the American-born French television journalist Anne Sinclair, expressed disbelief in the charges and faith in her husband’s innocence. His lawyer has said he would plead not guilty. Others talked darkly of a possible “setup” of Mr. Sarkozy’s most prominent rival.

How’s Strauss-Kahn Doing? (Telegraph)
“He’s tired but he’s fine,” DSK’s lawyer said. Continue reading »

$$$ Consumer Prices Rise as Confidence, Jobs Gain (Bloomberg)

$$$ Citi reinstates quarterly dividend at 1 cent (Reuters)

$$$ ECB Asks Court to Bar Greek Swap Disclosure, Cites Market-Disruption Risks (Bloomberg)

$$$ Emmanuel Goffer Denied Delay in Insider Trading Trial (Businessweek)

$$$ Falcone’s Harbinger to Raise $280 Million (Bloomberg)

$$$ President of Collapsed Monticello, N.Y., Hedge Fund Charged with Fraud (WSJ)

$$$ Surprise – Moody’s accidentally rates a bond too low (FT Alphaville) Continue reading »

SEC Eyes Charges For Bond Players (WSJ)
Securities and Exchange Commission officials are pushing hard as part of their ongoing probe of collateralized debt obligations and other mortgage-related products developed by Wall Street to bring charges against individuals, such as executives involved in selling the deals or outsiders who managed the assets, these people said. While the situation remains fluid, the agency also could file civil charges against hedge-fund managers who helped structure certain mortgage-bond deals but then bet against them.

U.S. bank failure costs to exceed estimates by $2 billion (Reuters)
The FDIC’s 2010 loss estimate for bank failures rose to $24.18 billion at year’s end, up from initial estimates of $22.17 billion. The bank regulator increased the loss estimate for 102 out of 157 banks that failed in 2010, according to SNL Financial.

Brevan Howard, Jamison Hedge Funds Said to Advance During Commodities Rout (Bloomberg)
The Brevan Howard Commodities Strategies Master Fund Ltd., which managed $368 million as of March 31, gained 1.1 percent in the first week of May, an investor report obtained by Bloomberg showed. Jamison’s Koppenberg Macro Commodity Fund Ltd., which manages more than $600 million, advanced about 4 percent, said two people with direct knowledge of the matter, declining to be identified because the information is private.

Germany and France Surprise With Strong Growth (NYT)
The euro area’s two largest economies, Germany and France, showed surprising strength in the first quarter of the year, helping lift the entire continent’s performance despite sharp pain along the edges. As a result, the European Commission said in its spring forecast, released Friday, that prospects for 2011 looked “slightly better” than six months ago.

Greece Default Anticipated by 85% in Investor Poll (Bloomberg)
Eighty-five percent of those surveyed this week said Greece probably will default, with majorities predicting the same fate for Portugal and Ireland, which followed Greece in seeking European Union-led bailouts, a new Bloomberg Global Poll shows. The outlook for all three countries deteriorated since January.

Goldman’s O’Neill Says ‘Black Swan’ Concern Overblown, Stocks Set to Rally (Bloomberg)
The view that “the West is in trouble” is wrong when nations including Germany, Sweden, Australia and Canada are performing strongly, O’Neill said in an interview with Bloomberg Television in Hong Kong, recorded yesterday and broadcast today. Investors should “stop worrying so much,” said O’Neill, known for coining the BRIC acronym for Brazil, Russia, India and China…“Every little problem that crops up somewhere in the world is not going to create another black swan,” he said, adding that “there’s far too much conservatism,” in terms of investors holding cash.

Rajaratnam Loss Raises Questions Over Defense Strategy (WSJ)
Mr. Dowd’s closing argument was one of many components of Mr. Rajaratnam’s ultimately failed defense strategy. Many moves by the defense team and Mr. Rajaratnam are now likely to be evaluated, including the selection of a largely working-class jury in a case involving a billionaire, his choice not to take the stand, Mr. Dowd’s often-combative style, and the overarching attempt to convince jurors that the hedge-fund titan only relied on publicly available information in the face of recordings to the contrary.

Rand Paul says people who support universal healthcare ‘believe in slavery’ (LA Times)
Rand Paul, the freshman senator from Kentucky, was speaking recently about healthcare, specifically the new healthcare law some refer to as “Obamacare.”  Like many Republicans, Paul, the son of Rep. Ron Paul (R-Texas), doesn’t like it. Unlike many conservatives, the “tea party” darling doesn’t like the law  because it reminds him of slavery. Continue reading »