Opening Bell: 05.13.11

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SEC Eyes Charges For Bond Players (WSJ)
Securities and Exchange Commission officials are pushing hard as part of their ongoing probe of collateralized debt obligations and other mortgage-related products developed by Wall Street to bring charges against individuals, such as executives involved in selling the deals or outsiders who managed the assets, these people said. While the situation remains fluid, the agency also could file civil charges against hedge-fund managers who helped structure certain mortgage-bond deals but then bet against them.

U.S. bank failure costs to exceed estimates by $2 billion (Reuters)
The FDIC's 2010 loss estimate for bank failures rose to $24.18 billion at year's end, up from initial estimates of $22.17 billion. The bank regulator increased the loss estimate for 102 out of 157 banks that failed in 2010, according to SNL Financial.

Brevan Howard, Jamison Hedge Funds Said to Advance During Commodities Rout (Bloomberg)
The Brevan Howard Commodities Strategies Master Fund Ltd., which managed $368 million as of March 31, gained 1.1 percent in the first week of May, an investor report obtained by Bloomberg showed. Jamison’s Koppenberg Macro Commodity Fund Ltd., which manages more than $600 million, advanced about 4 percent, said two people with direct knowledge of the matter, declining to be identified because the information is private.

Germany and France Surprise With Strong Growth (NYT)
The euro area’s two largest economies, Germany and France, showed surprising strength in the first quarter of the year, helping lift the entire continent’s performance despite sharp pain along the edges. As a result, the European Commission said in its spring forecast, released Friday, that prospects for 2011 looked “slightly better” than six months ago.

Greece Default Anticipated by 85% in Investor Poll (Bloomberg)
Eighty-five percent of those surveyed this week said Greece probably will default, with majorities predicting the same fate for Portugal and Ireland, which followed Greece in seeking European Union-led bailouts, a new Bloomberg Global Poll shows. The outlook for all three countries deteriorated since January.

Goldman’s O’Neill Says ‘Black Swan’ Concern Overblown, Stocks Set to Rally (Bloomberg)
The view that “the West is in trouble” is wrong when nations including Germany, Sweden, Australia and Canada are performing strongly, O’Neill said in an interview with Bloomberg Television in Hong Kong, recorded yesterday and broadcast today. Investors should “stop worrying so much,” said O’Neill, known for coining the BRIC acronym for Brazil, Russia, India and China…“Every little problem that crops up somewhere in the world is not going to create another black swan,” he said, adding that “there’s far too much conservatism,” in terms of investors holding cash.

Rajaratnam Loss Raises Questions Over Defense Strategy (WSJ)
Mr. Dowd's closing argument was one of many components of Mr. Rajaratnam's ultimately failed defense strategy. Many moves by the defense team and Mr. Rajaratnam are now likely to be evaluated, including the selection of a largely working-class jury in a case involving a billionaire, his choice not to take the stand, Mr. Dowd's often-combative style, and the overarching attempt to convince jurors that the hedge-fund titan only relied on publicly available information in the face of recordings to the contrary.

Rand Paul says people who support universal healthcare 'believe in slavery' (LA Times)
Rand Paul, the freshman senator from Kentucky, was speaking recently about healthcare, specifically the new healthcare law some refer to as "Obamacare." Like many Republicans, Paul, the son of Rep. Ron Paul (R-Texas), doesn't like it. Unlike many conservatives, the "tea party" darling doesn't like the law because it reminds him of slavery.

China Fund Confident of Getting More Cash (WSJ)
China Investment Corp. is making progress toward getting fresh funds, one of its top officials said, addressing uncertainty about the future of the sovereign-wealth fund, which faces critical scrutiny over its performance after investing all of its initial $200 billion.

Crédit Agricole doubles profits to €1bn (FT)
Crédit Agricole’s quarterly net profit rose to €1.0bn ($1.42bn) from €470m a year ago, which was higher than average analyst expectations of about €992.5m, according to a Reuters poll.

I.R.S. Moves to Tax Gifts to Groups Active in Politics (NYT)
Invoking a provision that had rarely, if ever, been enforced, the Internal Revenue Service said it had sent letters to five donors, who were not identified, informing them that their contributions may be subject to gift taxes depending on whether the donations exceeded limits under the tax laws.

1 in 3 young NYers plans to leave state (AP via NYP)
A recent poll finds that 1 in 3 New Yorkers under age 30 plans to move to another state at some point…The poll finds that most of those who plan to move will do so because of economic reasons including jobs, the cost of living, and taxes.

'Fair Value' Accounting Guidelines Tweaked (WSJ)
Perhaps the most significant changes affect companies' disclosures about their "Level 3" assets, which are the risky, illiquid securities valued using a company's own estimates and models rather than market prices. Companies will have to disclose more about the processes and assumptions they use in their Level 3 valuations. They will also have to discuss what might happen to the company's valuations if the factors they are using were to change.

Ashton Kutcher Will Join 'Two and a Half Men' (Hollywood Reporter)
Two sources close to the deal-making tell The Hollywood Reporter that the actor is putting the final touches on a deal to replace Charlie Sheen as the star of TV’s No. 1 comedy.

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