Opening Bell: 04.21.09

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Ratings Companies Lean On First Amendment (WSJ)
The Firm's attorneys are claiming they issue opinions, and thus are protected under the first amendment. I would go with totally fabricated bullshit in the place of opinions, but either way it works.
"Richard Blumenthal, the Connecticut attorney general, sees it differently. Mr. Blumenthal has filed a lawsuit about ratings issued by S&P, though not in connection with mortgage-backed securities. "The very nature of [rating firms'] so-called speech is very different from the classic First Amendment-protected expression," Mr. Blumenthal says. "It's much more akin to an advertisement that misstates the price of an item on sale than a political candidate on a soapbox.""
Loan Quality Big Part Of Stress Tests (Bloomberg)
It would be amazing if the Government missed loan quality as a primary point of interest in any "test" that could be performed on banks (results driven or not); I suppose they deserve a bit of a golf clap here for picking up on the obvious.
"The person also said the tests don't amount to solvency judgments, noting that estimates of each bank's losses over the coming two years won't necessarily equal the amount of new capital it needs to raise.
The goal of the reviews is to keep the major financial institutions lending over the next two years, and to determine how much capital they might need should the economic downturn worsen. Assumptions about capital will be forward-looking, the official said."
Inspector General Reams Treasury On Transparency, Potential Fraud (NYT)
If you can make it through the 250 pages in one sitting without hemorrhaging you deserve something akin to lottery winnings. Barofsky doesn't save any punches here, nor should he.
"Mr. Barofsky also warned that the Treasury's plan might allow investors to double up on government subsidies for buying up troubled assets. The Public-Private Investment Program would have the Treasury invest alongside private investors. But the partnerships would also be able to borrow money from the Fed through "nonrecourse" loans. If the investments flopped, the investors could walk away from the loans and leave taxpayers with most of the losses."
EU Drafts To Regulate Hedge Funds 'Almost Worthless' (FT)
See, this is the problem with there not being a major intercontinental (global?) military conflict; everyone has time to think of stupid shit.
"The leaked draft suggests that the Commission plans to regulate managers of "alternative" funds, rather than the funds directly. This is one of the main objections of the Socialist MEPs and the private-equity industry, who say it would mean that non-EU managers could still operate in the EU, and market their funds, without any effective oversight."
UBS Might Be Looking To Sell Hedge Fund Business (Reuters)
It appears that the disassembly of UBS is continuing; they're now looking to dump their Alternative & Quantitative Investments line.
"Citing unnamed financial sources, the Neue Zuercher Zeitung said a management buyout offer for A&Q, or parts of it, was on the table, which the newspaper said would fit into the bank's strategy of focusing the bank and cutting its risks.
UBS was not immediately available for comment on the report.
The NZZ said the business had more than $39 billion in assets under management and employed about 350 people worldwide."

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