Opening Bell: 05.01.12

US Considers Notes That Float (WSJ)
After a series of meetings early this week, Treasury officials will decide whether to start issuing floating-rate debt for the first time ever. Instead of the interest rate being fixed throughout the life of the notes, the rate would move up and down as overall rates move higher and lower. The change would be the first new addition to the Treasury’s arsenal of debt products in 15 years. Analysts are widely expecting Treasury officials to sign off on the program.

Fed Said to Criticize Banks on Risk Models in Stress Test (Bloomberg)
The Federal Reserve criticized how some of the 19 largest U.S. banks calculated potential losses and planned dividends in this year’s stress tests, people with knowledge of the process said. The critiques will be part of feedback letters sent to the lenders this week that cover everything from data collection to risk measurement, said three of the people, who declined to be identified because communications with the Fed are private. Flaws included marking down all housing prices at the same rate, rather than matching them to specific regions, and planning dividends that could drain needed capital.

Greeks To Protest Austerity In May Day Rallies (Reuters)
Greece’s two major private and public sector unions GSEE and ADEDY plan to hold a rally in Athens to mark the national holiday, while the Communist-affiliated PAME group was also scheduled to hold a separate rally. Police prepared for the violence that has come to mark many such rallies once demonstrators reach the main square in front of parliament, though Athens has not seen major clashes since an unpopular austerity bill was approved in February. Athens buses, trains and the subway came to a standstill as transport workers staged a 24-hour strike, while Greek seamen held a four-hour stoppage. Public sector offices were shut and hospitals worked on emergency staff.

Occupy Wall Street denies link to May Day white powder bank scare (AP)
Police say seven envelopes were sent Monday to several Wells Fargo branches, a JP Morgan Chase branch and an office building. Telephone calls to Wells Fargo and JP Morgan Chase were not immediately returned. Police say the suspicious envelopes caused evacuations of several bank branches, but no injuries were reported. Police had no suspects. Representatives at some of the banks involved told CBS News the envelopes contained a note stating “Happy May Day.” The envelopes were sent on the eve of planned May Day protests around the country. Bill Dobbs, a spokesman for Occupy Wall Street, said the prank had nothing to do with their protest movement. He said the incidents distract from the May 1 events.

Man Group Has $1 Billion Outflows (Bloomberg)
The company reported that net cash fell 56 percent to $250 million in the three months ended in March, raising concern that it’s spending too much money at a time when profits are falling. Finance Director Kevin Hayes said on a call with analysts that staff bonuses, taxes and loans to some of Man Group’s funds accounted for the lower cash reserve.

Calif. Man Sues BMW For Persistent Erection (CBS via Consumerist)
enry Wolf of California is suing BMW America and aftermarket seatmaker Corbin-Pacific claiming his issue began after a four-hour ride on his 1993 BMW motorcycle, with a ridge like seat. Wolf is seeking compensation for lost wages, medical expenses, emotional distress and what he calls “general damage.” He said he’s had the erection non-stop for 20 months. And it comes with another side effect: The lawsuit says Wolf is “now is unable to engage in sexual activity, which is causing him substantial emotional and mental anguish.”

Icahn: No feud with Phil (NYP)
Investor Carl Icahn yesterday downplayed the notion that he’s in a feud with hedge fund bigwig Phil Falcone over wireless venture LightSquared. Speaking at an activist investing conference in Midtown, Icahn said newspapers that have been writing about his standoff with Falcone “are making this into this huge shoot-out that it’s really not.” “We don’t call the shots in that deal,” he said at the conference, hosted by 13D Monitor, when asked about his plans for LightSquared. “We have one seat on the committee out of six.”

Groupon Board Regrouping (DJ)
The young daily deals company, which went public just six months ago to much fanfare, is adding financial expertise to its board as it tries to clean up an accounting mess that rapidly deflated its stock. Groupon yesterday appointed financial heavyweights Daniel Henry, chief financial officer of American Express, and Robert Bass, vice chairman of Deloitte, as directors. The two are replacing Starbucks CEO Howard Schultz, who is stepping down, and venture capitalist Kevin Efrusy, who won’t stand for re-election.

Analysts See Record S&P 500 (Bloomberg)
FYI: Analysts predict U.S. shares will rise enough this year to boost the Standard & Poor’s 500 Index to a record, even as Wall Street strategists say the best is already over for American equities.

Judge rejects ‘Hail Mary’ motion for diplomatic immunity from DSK (NYP)
The former International Monetary Fund chief tried to claim the protection in the civil case filed against him last August by chambermaid Nafissatou Diallo, who claims he sexually assaulting her in a “violent and sadistic attack” in the Midtown Sofitel hotel nearly one year ago. DSK was cleared of all criminal charges in the incident, but not before resigning from his post as chief of the IMF. “Confronted with well-stated law that his voluntary resignation from the IMF terminated any immunity which he enjoyed…Mr. Strauss-Khan, threw [legally speaking that is] his own version of a Hail Mary pass,” Judge Douglas McKeon wrote in his decision, handed down today. DSK did not claim immunity when Manhattan DA Cy Vance was pursuing the criminal charges against him, McKeon pointed out. “Mr. Strauss-Khan cannot eschew immunity in an effort to clear his name only to embrace it now in an effort to deny Ms. Diallo the opportunity to clear hers,” McKeon wrote. McKeon’s decision began with a quotation inserted in to the IMF’s 2011 annual report: “The reputation of a thousand years may be determines by the conduct of one hour.”

27 comments (hidden to protect delicate sensibilities)
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Comments (27)

  1. Posted by typopolice | May 1, 2012 at 9:37 AM

    “The reputation of a thousand years may be determines by the conduct of one hour.”

    Who the eff is in charge of proofreading over there?

  2. Posted by Bandersnatch | May 1, 2012 at 9:39 AM

    Seconded: "… hedge fund bigwig Phil Falcone …" Surely he's only a regular sized wig at this point.

  3. Posted by Guest | May 1, 2012 at 9:43 AM

    Icahn said newspapers that have been writing about his standoff with Falcone “are making this into this huge shoot-out that it’s really not.” “We don’t call the shots in that deal,” he said at the conference, hosted by 13D Monitor, when asked about his plans for LightSquared. “We have one seat on the committee out of six…and a bunch of shit on him that he'd probably prefer we kept quiet about.”

  4. Posted by Dr_Rosenrose | May 1, 2012 at 9:51 AM

    Yes-huh the Fed is independent. They could keep rates low on these trillions of floating rate notes, or they could raise rates, cripple the country and lose their jobs – if that's not independent, I don't know what is.

  5. Posted by Alt_EST | May 1, 2012 at 9:53 AM

    Its the pleats.

    -Bayerische Moteren Werke

  6. Posted by BloombergNews | May 1, 2012 at 9:53 AM

    Former Bear Stearns Chairman Alan "Ace" Greenberg today announced a gift of $1mm to BMW of North America to provide motorcycles to men over 70 years-old without the means to purchase one of their own.

  7. Posted by pazzo83 | May 1, 2012 at 9:55 AM

    "Police say seven envelopes were sent Monday to several Wells Fargo branches, a JP Morgan Chase branch and an office building."

    Empathy anthrax?

  8. Posted by Whoops | May 1, 2012 at 9:59 AM

    Knowing these Einsteins, I'm surprised they didn't send the powder to an Amalgamated branch.

  9. Posted by Wonderer | May 1, 2012 at 10:03 AM

    I wonder which swap desk(s) will reap the benefit of the new FRN program.

  10. Posted by Geithner | May 1, 2012 at 10:05 AM

    Hedging is for pussies

  11. Posted by Guest | May 1, 2012 at 10:06 AM

    Sex hurricane = DSK on a BMW with a Corbin seat.

  12. Posted by Deleveraging | May 1, 2012 at 10:12 AM

    I wonder if Groupon's new board members were recruited via a daily deal.

  13. Posted by Egan Jones | May 1, 2012 at 10:14 AM

    FUI we've downgraded him to highflying.

  14. Posted by Guest | May 1, 2012 at 10:21 AM

    Stay horny my friends.

    DSK

  15. Posted by fan | May 1, 2012 at 10:34 AM

    I celebrate Neil Diamonds whole catalog.

  16. Posted by Actuary Insurance | May 1, 2012 at 10:35 AM

    This works for us.

  17. Posted by guest | May 1, 2012 at 10:48 AM

    I should sue these new interns for my non-stop erection around the office.

    -creepy MD

  18. Posted by motives | May 1, 2012 at 10:55 AM

    seconded.

    -AIG Risk Dept.

  19. Posted by UBS MD | May 1, 2012 at 10:56 AM

    My wife is going be so proud when I tell her I traded in my 2005 civic for this 1993 BMW cycle

  20. Posted by FedEx Air/Ground | May 1, 2012 at 11:03 AM

    Agreed.

  21. Posted by _guest | May 1, 2012 at 11:10 AM

    My guess is that at some point US interest rates will go up, and when they do, bond prices will go down.

    -UBS Fixed Rate Debt Quant

  22. Posted by Banksta rhymes | May 1, 2012 at 11:37 AM

    Who underwrote that scam? Oh yeah, that's write….

  23. Posted by Guest | May 1, 2012 at 11:52 AM

    I think BMW should pick this guy as their spokesperson.

  24. Posted by Neil S | May 1, 2012 at 12:03 PM
  25. Posted by trojan_ | May 1, 2012 at 1:03 PM

    Can our city council buy a swap off of you?
    -Mayor McCheese
    Burgertown, IN, USA

  26. Posted by Cynic | May 2, 2012 at 1:37 AM

    I assume these notes will float off of LIBOR. Talk about offering up an economic nuke to The World. Genius.

  27. Posted by bookmarking submission | September 10, 2012 at 8:26 PM

    NqWLIi Fantastic blog article.Thanks Again. Want more.