Opening Bell: 05.17.11

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IMF chief claims consent in hotel 'attack' (NY Post)
"The evidence, we believe, will not be consistent with a forcible encounter," said Ben Brafman, the high-powered lawyer of IMF chief Dominique Strauss-Kahn, at the suspect's sensational arraignment in a packed criminal courtroom. A source close to the defense later told The Post, "There may well have been consent."

New York Investigates Banks’ Role in Fiscal Crisis (NYT)
The New York attorney general has requested information and documents in recent weeks from three major Wall Street banks about their mortgage securities operations during the credit boom, indicating the existence of a new investigation into practices that contributed to billions in mortgage losses. Officials in Eric T. Schneiderman’s, office have also requested meetings with representatives from Bank of America, Goldman Sachs and Morgan Stanley, according to people briefed on the matter who were not authorized to speak publicly.

How Big Investors Are Betting (WSJ)
Mr. Cohen, whose SAC Capital reported a 9.3% increase in securities holdings in the quarter ended March 31, increased a stake in consumer electronics retailer Best Buy Co. to 2.3 million shares from 53,306 at the end of the previous quarter. SAC also more than doubled its stake in BJ's Wholesale Club Inc. to 2.8 million shares from 1.1 million.

John Paulson Loves Hewlett-Packard (Deal Journal)
The $5 Billion Man, hedge fund manager John Paulson, reported plowing $1 billion into Hewlett-Packard, pared his stake in Citigroup and is standing pat with his big investment in a gold ETF…Paulson & Co. also disclosed owning 123.6 million shares of Bank of America, down by 226,522 from the end of 2010. And one interesting new holding showing up on Paulson’s radar: Lubrizol.

Soros Fund Cuts Gold, BofA, J.P. Morgan Stakes; Adds to Citi, Wells (Deal Journal)
Soros decreased his holdings of the SPDR Gold Trust, a gold-backed exchanged-traded fund, by 4.7 million shares to 49,400 shares, valued at $6.9 million at March 31…The fund lowered its Bank of America holding by 1.2 million shares and now owns 29,400 shares. Soros sold 378,050 shares of J.P. Morgan, leaving him with 624,600 shares. In contrast, his firm tripled its stake in Citigroup to 29.4 million shares. Soros’ stake in Wells Fargo climbed six-fold to 3.5 million shares.

Bill Ackman Throws in the Towel on Target (Deal Journal)
Pershing Square reported owning 7.4 million Target shares as of Dec. 31, but there is no whisper of the Target investment in Pershing’s latest snapshot of its stock holdings as of March 31.

David Einhorn Buys…General Motors (DJ)
David Einhorn’s Greenlight Capital investment fund reported new ownership stakes in two newly public companies, hospital operator HCA Holdings and General Motors, a.k.a. Government Motors.

Falcone’s Harbinger Holdings Adds Bunge Shares, Trims Gold Stake (Bloomberg)
Harbinger Holdings LLC, the hedge fund run by Philip Falcone, bought shares of food company Bunge Ltd. (BG) in the first quarter and sold shares of SPDR Gold Trust, according to a regulatory filing.

Schwarzenegger fathered a child with longtime member of household staff (LA Times)
Former California Gov. Arnold Schwarzenegger and his wife, Maria Shriver, separated after she learned he had fathered a child more than a decade ago — before his first run for office — with a longtime member of their household staff.

Jump in Revenue Helps Halve California Deficit (NYT)
After months of doomsday scenarios and apocalyptic warnings about cuts to California schools, parks and the police, the news from Gov. Jerry Brown on Monday was nothing short of startling: California is now expected to see $6.6 billion more in revenue over the next two years than had been expected.

U.K. Inflation Quickens More Than Forecast (Bloomberg)l
Consumer prices rose 4.5 percent in April after a 4 percent increase in March, data today showed. The median forecast of 32 economists in a Bloomberg News survey was 4.1 percent. Core inflation quickened to the fastest in at least 14 years. King said in a letter to Chancellor of the Exchequer George Osborne that the surge is being driven by higher sales tax and increases in energy and import prices.

London Finance Job Openings Climbed 15% in April (Bloomberg)
The number of openings in the City, London’s main financial district, and elsewhere in the capital rose to 6,426 last month from 5,569 in April 2010, executive search firm Morgan McKinley said today. The figure was flat compared with the previous month.

President, first lady’s assets valued at $1.8 million to nearly $12 million (WaPo)
Financial disclosure documents released Monday showed the assets for last year…Assets are listed in wide ranges on the disclosure forms — for example, between $1 million and $5 million — making it difficult to determine their value with precision. Royalties from Obama’s books, “Dreams From My Father” and “Audacity of Hope,” totaled between about $1 million and $6 million.

Man To Eat 25,000th Big Mac (HP)
Wisconsin-based Don Gorske plans to eat his 25,000th Big Mac on May 17, 2011, 39 years after his first Big Mac bite on May 17, 1972. He averages two Big Macs per day and has 10,000 Big Mac cartons still in his possession. He keeps two Big Macs in his luggage in case he cannot find a McDonald’s when he travels. Gorske believes he has drank over 200,000 Cokes along with his burgers.

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Opening Bell: 05.16.12

Greece Teeters As Talks Fail (WSJ) In a potent sign of Greeks' rising anxiety, depositors withdrew €700 million ($898 million) from local banks on Monday alone, according to the country's national bank—a significant escalation in capital flight from the country. Greek President Karolos Papoulias told party leaders that the situation facing Greece's lenders was very difficult and that "the strength of banks is very weak right now," according to a transcript released Tuesday. Merkel: I Want Greece To Stay In The Euro (CNBC) In an interview with CNBC's "Worldwide Exchange," Merkel said: "I want, just like Jean-Claude Juncker, that Greece stays in the euro. I think that would be good for Greece and for all of us. If Greece believes that we can find more stimulus in Europe in addition to the Memorandum (the deal stuck with the Troika), then we have to talk about that," she said, but she underlined that Greece and its euro zone partners had to be able to trust each other. What Happens When Greece's Money Runs Out (Reuters) "I'm really not sure Greece could survive for very long if external money was cut off," said Darren Williams, economist at fund manager AllianceBernstein. "But what an experience of IOUs may do rather quickly is bring home to the average Greek citizen just how much more difficult a place it is outside the bailout program and outside the euro." Moore Leads Hedge Funds Betting on JPMorgan Before Losses (Bloomberg) Hedge funds Moore Capital Management LLC and Blue Ridge Capital LLC boosted their stakes in JPMorgan Chase, while Kingdon Capital Management LLC divested, before the shares plunged because of a $2 billion trading loss. Moore, the $15 billion New York-based firm run by Louis Moore Bacon, bought 6 million shares of JPMorgan and its $297.3 million stake was its largest U.S. stock holding as of March 31, according to a filing yesterday with the Securities and Exchange Commission. John Griffin’s New York-based Blue Ridge purchased 1.85 million shares, raising its stake in the bank to 6.14 million. The man who beached ‘Moby Iksil’ (NYP) Boaz Weinstein, a renowned CDS index arbitrageur who launched Saba in 2009, in early February recommended the index, which tracks a basket of US corporate bonds. “They are very attractive” and can be bought at a “very good discount,” said Weinstein, a former Deutsche Bank proprietary trader, speaking at the Harbor Investment Conference on Feb. 2. It appears the index was so cheap because Iksil was buying it to make a big short bet. Weinstein, whose Saba overseas $5.5 billion in assets, decided to go long and said he bought the index a few days before the conference at around 120 basis points. For a while, Weinstein’s genius trade wasn’t working out. The IG9 Index continued to sink under the weight of the Whale’s buys — hitting a low of 105 on March 21. But two weeks later, on April 3, reports surfaced about the Whale’s outsize positions and the tide started to turn. The price spiked to 130 as traders piled on. What JPMorgan CEO Jamie Dimon first termed a “tempest in a teapot” started to get serious. By last week, Dimon announced a $2.3 billion loss on the Whale’s trade, and word spread that Iksil’s head may roll. Meanwhile, Weinstein, who earned roughly $100 million last year, saw his position and the index continue to soar. The CDS index traded around 146 yesterday. Facebook Said to Raise Size of IPO to 421 Million Shares (Bloomberg) Facebook is boosting the number of shares for sale in its initial public offering to 421.2 million, allowing the world’s most popular social network to raise as much as $16 billion. Existing holders will offer 241.2 million shares, compared with the 157.4 million they originally planned to sell, according to a regulatory filing today. Menlo Park, California- based Facebook and its existing holders had earlier planned to offer 337.4 million shares. Soros’s Firm Buys JPMorgan, Suntrust in First Quarter (Bloomberg) The $25 billion Soros Fund Management LLC, based in New York, increased the value of its stake in financials by 7 percent, including 606,000 shares of JPMorgan worth $28 million as of March 31, and 3.2 million shares of Atlanta-based Suntrust valued at $77 million, according to a filing yesterday with the U.S. Securities and Exchange Commission. Paulson Holds to Gold ETFs in First Quarter, Profits as Prices Rise (Reuters) So that's nice. Housing Starts Probably Rebounded From a Five-Month Low (Bloomberg) “Homebuilding is inching up pretty much everywhere in the U.S.,” said Patrick Newport, an economist at IHS Global Insight in Lexington, Massachusetts. “The days when housing was a drag on the economy are behind us.” Even so, “housing activity is at depressed levels,” with foreclosures “still a problem for builders,” he said. Bloomberg Reporter Makes Wardrobe Adjustment On Camera (DM, NYO) A microphone mishap led one television reporter from revealing a bit more than she expected. When it became clear that one reporter's mic was not working, the cameraman swapped over quickly to Sara Eisen. Clearly thinking she was off-camera, the Bloomberg News reporter was adjusting her skirt and smoothing out her undergarments. Because the camera swapped over to her sooner than expected, the financial-savvy viewers caught a glimpse of Ms Eisen's underwear...In spite of the hiccup, Ms Eisen was able to brush her skirt down and get back to business. She flashed a quick, knowing smile and then moved right into the news about Spain's banking system debate.