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Opening Bell: 07.02.10

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Goldman Defends AIG Deals (WSJ)
Documents released by the panel showed Goldman repeatedly valued these securities lower than rivals did, demanding additional money from AIG, which was insuring against losses in the securities. These and other banks' collateral demands strained AIG, which was bailed out by the U.S. government in September 2008. At the time, Goldman had placed a trading bet with the firm's money against the mortgage market. Lower valuations, or "marks," would have made that bet more profitable. Goldman executives defended their practices. "Our marks were based on actionable prices, informed by market information from comparable transactions," David Lehman, a Goldman managing director, told members of the Financial Crisis Inquiry Commission.

AIG CEO and chairman to work out differences (Reuters)
Benmosche told the board at a meeting last week he wanted Golub to leave the company and would himself resign if that did not happen. The issue for Benmosche was that if the board were making such decisions, what was he doing as chief executive, the source said, declining to be named because these talks are private. The two sides had to work that through, and there is "a conciliatory direction now," the source said, adding that everyone was dedicated to paying back taxpayers.

BP's Relief Well for Plugging Oil Leak Is Ahead of Schedule (Bloomberg)
This deserves a pat on the back.

Energy Hedge Funds Close After Investor Withdrawals (Bloomberg)
At least six funds managing more than $158 million shut in the first half, including four in May and June, according to data compiled by Bloomberg. London-based Rampart Capital LLP succumbed after failing to reach “critical mass” within nine months of opening, according to Chief Investment Officer Marcello Romano.

Some NY Hedge Fund Execs May Escape New Tax (Reuters)
Hedge fund executives who commute from Connecticut or New Jersey to offices in New York might escape having to pay income taxes on their investment profits after all, Governor David Paterson said Thursday. Another way of extracting more money from the ultra-rich -- halving the state's charitable deduction to 25 percent for people whose yearly incomes top $10 million -- also might fall by the wayside, the Democratic governor told WOR radio. "It might be far more responsible for us to revisit that issue, particularly about the hedge fund managers, because according to Mayor Bloomberg, and he told me this yesterday, all they have to do is basically change their addresses," Paterson said.

Companies Push for Clarity on Derivatives Regulation (WSJ)
"I'm worried about the financial institutions taking the end users in effect as hostages to get out from under some of these requirements," said Rep. Barney Frank.