Opening Bell: 05.24.11 - Dealbreaker

Opening Bell: 05.24.11

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Strauss-Kahn's pals bid to pay off woman's kin (NYP)
Friends of alleged hotel sex fiend Dominique Strauss-Kahn secretly contacted the accusing maid's impoverished family, offering them money to make the case go away since they can't reach her in protective custody, The Post has learned.

JPMorgan, UBS, Deutsche Bank to Face N.Y. Probe (Bloomberg)
JPMorgan Chase & Co., UBS AG and Deutsche Bank AG are being investigated as part of New York Attorney General Eric Schneiderman’s expanded probe of mortgage securitization, according to a person familiar with the matter. Four bond insurers also were subpoenaed: Ambac Financial Group Inc., MBIA Inc., Syncora Holdings Ltd. and Assured Guaranty Ltd., according to the person, who couldn’t be identified because the probe isn’t public.

Moody's warns 14 UK banks face downgrade (Telegraph)
"The reassessment is not driven by either a deterioration in the financial strength of the banking system or that of the government," said Elisabeth Rudman, a Moody's senior credit officer and lead analyst for a number of UK banks, on Tuesday. "It has been initiated in response to ongoing guidance from the UK authorities (the Bank of England, the Financial Services Authority and the Treasury) that banks that fail in the future should not expect capital injections from the public purse."

Greek default could make others junk: Moody's (Reuters)
Portugal and Ireland would be at risk of multi-notch credit downgrades, pushing their ratings into junk territory in the event of a default by Greece, Moody's EMEA chief credit officer told Reuters on Tuesday.

French government says China backs Lagarde for IMF head (Reuters)
French Budget Minister and government spokesman Francois Baroin said on Tuesday that China supports Finance Minister Christine Lagarde as candidate to be the new head of the International Monetary Fund.

Goldman, Morgan Stanley Bullish on Commodities, Predict 20% Return on Oil (Bloomberg)
Goldman…boosted its 12- month prediction for Brent crude to $130 a barrel from $107, analysts led by Jeffrey Currie said in a report today. Morgan Stanley raised its Brent estimate by 20 percent to average $120 a barrel this year and by 24 percent to $130 in 2012, it said.

Steven Rattner: Valley’s euphoria is tech bubble version 1.5 (FT)
“Yet, just as Facebook and Google are viewed today as bullet-proof franchises, so was AOL viewed as impregnable in its day. Its more than 20m customers paid $19.95 a month in steadily recurring revenue for, among other things, early versions of e-mail, chat and networking. With the advent of the worldwide web, those subscribers were essentially paying for nothing more than slow-speed dial-up connections. As broadband access spread, the customers melted away. Today, AOL has a trading value of only $2bn.”

Morgan Stanley In Talks to Fund More Asian Hedge Funds Start-Ups This Year (Bloomberg)
The New York-based bank is helping negotiate several opportunities for investors to give money to new hedge funds for a share of their fee revenue and deals in which they will provide capital to expand assets across Asia, said Hugh Abdullah, its Hong Kong-based head of capital introductions in the region.

Goldman Sachs cuts China, Asia growth forecasts (MarketWatch)
Goldman Sachs Group Inc. on Tuesday cut its growth forecast for China and predicted inflation will accelerate, citing the impact of higher oil prices and supply-side constraints on the world's second-largest economy. In addition the bank lowered its outlook for the Asia region, excluding Japan.

SEC Deepens Probe of Forex Trading (WSJ)
At issue is whether "custody" banks—which handle securities and back-office tasks for institutional investors—are overcharging public pension funds for trading in the $4 trillion-a-day foreign-exchange market…A whistleblower group led by investor Harry Markopolos has sued BNY Mellon in Virginia and Florida, and rival State Street in California, accusing them of improperly pricing currency trades for state and local pension funds.

Feds diss banks' lowball $5B offer (NYP)
State attorneys general and federal agencies found an offer of $5 billion from five banks "woefully inadequate," according to a person familiar with the talks. Bank of America, JPMorgan Chase, Citigroup , Wells Fargo and Ally Financial made that offer two weeks ago. The amount was a far cry from the $20 billion the states and federal agencies had been discussing, although not formally proposing.

Call for Lehman creditors to reveal positions (FT)
A group of hedge funds and pension funds opposing the Lehman estate’s bankruptcy plan has asked the court to force many Lehman Brothers creditors – including banks such as Goldman Sachs – to reveal their current holdings of the defunct investment bank’s debts. The so-called Ad Hoc group of creditors, which includes hedge fund Paulson & Co, bond fund Pimco, and the Calpers retirement fund, were themselves compelled by the court, at the behest of Lehman, to disclose their holdings in March after they filed their own plan of organisation.

Goldman Finding Third Time a Charm in Russia (Bloomberg)
Goldman Sachs Group Inc. is making a third attempt in 17 years to crack the Russian market, this time by leveraging a $1 billion private-equity bet to win deals and wooing the Kremlin for roles in asset sales.

Volcanic Ash Forces Flight Cancellations in Europe (NYT)
“About 250 flights have already been canceled, mostly over Scotland” Kyla Evans, a spokeswoman for Eurocontrol, the Brussels-based agency that coordinates air traffic management across the region, said. “We would expect up to 500 flights to be canceled today. But it would very much depend on how the ash cloud moves, it could be many more or less.”

Radio host says Rapture actually coming in October (AP via USA Today)
[California preacher Harold] Camping, who predicted that 200 million Christians would be taken to heaven Saturday before the Earth was destroyed, said he felt so terrible when his doomsday prediction did not come true that he left home and took refuge in a motel with his wife. His independent ministry, Family Radio International, spent millions — some of it from donations made by followers — on more than 5,000 billboards and 20 RVs plastered with the Judgment Day message. But Camping said that he's now realized the apocalypse will come five months after May 21, the original date he predicted. He had earlier said Oct. 21 was when the globe would be consumed by a fireball.

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