Opening Bell: 04.05.11

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David Sokol's Ways Questioned In Past Suits (NYT)
The most serious lawsuit centered on the accounting of an irrigation project by MidAmerican Energy, where Mr. Sokol was chief executive when Berkshire bought it in 1999. In a rebuke last year, the judge ruled in that case that MidAmerican had improperly changed its accounting on the project and criticized Mr. Sokol directly. The change in accounting was “intended to eliminate the minority shareholders’ interests,” the judge wrote, awarding more than $32 million to the minority shareholders. The case had taken more than five years to work its way through the courts. During that time, Warren E. Buffett, the chief executive of Berkshire, expressed confidence in Mr. Sokol by broadening his portfolio beyond MidAmerican to include Netjets, a company that sells fractional use of private aircraft.

Bernanke Downplays Inflation (WSJ)
Bernanke said the recent rise in prices of oil, grains, and other global commodity prices is likely to be temporary and won't translate into a broader inflation problem. However, the Fed chief was quick to add that if his prediction is wrong and inflation begins to mark strong gains, the central bank would respond. "I think the increase in inflation will be transitory," Bernanke said. He attributed the sharp increases in prices for oil and food to "global supply and demand conditions," adding he reckoned these prices "will eventually stabilize."

Geithner Sees 'Severe Hardship' If Debt Limit Isn't Reached (Bloomberg)
Congress needs to raise the limit to maintain vital services and avoid “questions about our ability to defend our national security interests,” Geithner said. The U.S. would face sharply higher interest rates and would have to stop or delay payments to the military, retirees and others, he said. “Default would cause a financial crisis potentially more severe than the crisis from which we are only now starting to recover,” Geithner said. “For these reasons, default by the United States is unthinkable.”

Apple Crunched In Nasdaq Rebalance (WSJ)
In a move likely to ripple across the stock market, Nasdaq OMX plans to announce Tuesday a rare rebalancing of its Nasdaq-100 index, which will reduce the big weighting of Apple Inc. The company currently makes up more than 20% of the index.

Barclays Chief Set To Raise Appetite For Risk (FT)
Bob Diamond has decided Barclays must increase its risk appetite amid internal expectations at the bank that a key measure of its profitability will fall or stay stagnant this year. Barclays’ new chief executive is considering increasing the bank’s risk profile, in order to hit profitability targets over the next three years, according to people familiar with the bank’s thinking. Mr Diamond, who began in his job in January, has set a target of achieving a 13 per cent return on equity by 2013.

Santander Tops Goldman As Greenest Bank (Bloomberg)
At Banco Santander SA headquarters on the outskirts of Madrid, Joaquin de Ena says he’s gotten used to wearing his sweater vest indoors after the bank turned down the heat to trim power use and greenhouse-gas emissions. “This is OK,” de Ena, director of corporate social responsibility, says with a laugh as he looks at a conference room thermostat as a chilly wind blows through the capital on an early March day. “I’m not sure if it should go any lower.” Santander’s in-house conservation and ecominded investments won it top billing in Bloomberg Markets’ inaugural ranking of the world’s greenest banks...Goldman Sachs was second overall and topped the list for green investing. New York-based Goldman, along with No. 4 bank Credit Suisse, managed the $3 billion initial public offering of Enel Green Power SpA, Rome-based operator of wind, geothermal and hydropower plants. Goldman also co-led the IPO of Tesla Motors, the Palo Alto, California, maker of the $109,000 all-electric Roadster.

Portugal Banks Threaten To Shun Bonds (Reuters)
Portugal's biggest banks will stop buying government bonds and are urging the caretaker administration to seek a short-term loan to secure financing until a June 5 election.

Moody's Adds To Pressure On Portugal (WSJ)
"Moody's rating action was driven primarily by increased political, budgetary and economic uncertainty, which increase the risk that the government will be unable to achieve the ambitious deficit reduction targets set out in the update of its Stability and Growth Programme for 2011-2014 and put its finances on a sustainable trajectory," the credit rating agency said in a statement.

SEC Sought Loan-Loss Reserves Info From BofA (Reuters)
In an exchange of letters, the U.S. Securities and Exchange Commission (SEC) had also asked Bank of America to explain its methodology of establishing repurchase reserves. "Discuss the level and type of repurchase requests you are receiving, and any trends that have been identified, including your success rates in avoiding settling the claim," the regulator said in a letter dated Jan. 29, 2010.

Citigroup Warns Of Email Breaches (Bloomberg)
Citi and US Bancorp are among the companies warning tens of thousands of customers to beware of cyber thieves who stole names and e-mail addresses from a company that markets their products. The breach occurred at Alliance Data System Corp.’s Epsilon Data Management LLC, a Dallas-based provider of e-mail marketing services that says it sends out more than 40 billion e-mails a year on behalf of more than 600 companies. Epsilon said the breach occurred March 30.

Southwest Incident Shows Hazard Of Old Plane (WSJ)
On Friday, a five-foot gash opened in a 737 fuselage during a Southwest flight, prompting an emergency nose dive while passengers hurriedly donned oxygen masks. The plane landed safely.

Authorities Find 5 Pounds of Pot Hidden in Wheelchair (KLTA)
A 19-year-old man is under arrest after U.S. Customs and Border Protection officers found five pounds of marijuana hidden inside the seat of a wheelchair. Authorities made the bust at the pedestrian processing area at the border crossing in San Ysidro. Officers said they noticed the man, who was in a wheelchair, seemed nervous.

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