Opening Bell: 05.04.09

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White House Denies Claims of Threat to Chrysler Creditor (Dealbook)
The charge is of course false as both parties who would know the facts have pointed out," Bill Burton, a White House spokesman, told DealBook. "It is neither substantiated by people involved in the conversations nor by what has transpired over the course of the last couple of days."
New York Fed Chairman's Ties to Goldman Raise Questions (WSJ)
"Mr. Friedman, who once ran Goldman, says none of these events involved any conflicts. He says his job as chairman of the New York Fed isn't a policy-making one, that he didn't consider his purchases of more Goldman shares to conflict with Fed policy, and bought shares because they were very cheap."
Worries Rise On Size Of US Debt (NYT)
"Last week, the yield on 10-year Treasury notes rose to its highest level since November, briefly touching 3.17 percent, a sign that investors are demanding larger returns on the masses of United States debt being issued to finance an economic recovery.
[...]
Already, in the first six months of this fiscal year, the federal deficit is running at $956.8 billion, or nearly one seventh of gross domestic product -- levels not seen since World War II, according to Wrightson ICAP, a research firm."
Citi And BofA Look To Raise Capital (FT)
"People close to the situation said Citi, BofA and at least two other lenders will on Monday attempt to convince the Treasury and the Federal Reserve that the findings of "stress tests" into their financial health were too pessimistic."
AIG Dumps Japanese Headquarters (Reuters)
"American International Group Inc is close to selling its Japanese headquarters for about $1 billion and the expected buyer is a Japanese insurance company, the Wall Street Journal reported, citing people familiar with the matter.
With Japanese markets closed for the Golden Week holidays until Wednesday, the exact timing of a deal was unclear, the paper said."
No, Really? Hedge Funds Manage Separate Accounts To Keep Clients (WSJ)
"By keeping money in a distinct account, an investor can see how it's being managed, position by position. In theory, that provides an early warning if a manager shifts into risky or illiquid investments. Investors also can place their own value on their account, addressing complaints about how some managers "mark" their positions, particularly those that don't trade regularly. And separate accounts are owned by the investors, so a manager can't restrict withdrawals, as happened too often last year."


GM Bond Holders Putting Up A Fight (Bloomberg)
"With GM and its biggest bondholders at odds over resolving $27 billion in unsecured claims by a June 1 deadline, the Chrysler model indicates that President Barack Obama may resort to bankruptcy to end any impasse over that debt, said Martin Fridson, chief executive officer of New York-based credit investment firm Fridson Investment Advisors.
Chrysler filed for protection April 30 after the U.S. was unable to persuade secured lenders to swap $6.9 billion in claims for $2.25 billion in cash. A union retiree health-care trust was offered a 55 percent stake in Chrysler."

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