Opening Bell: 05.25.11

Author:
Publish date:
Updated on

Lagarde Announces IMF Candidacy (WSJ)
France's Finance Minister Christine Lagarde on Wednesday officially declared her candidacy to replace Dominique Strauss-Kahn as managing director of the International Monetary Fund, launching a global race for the prominent position. "Today, I would like to declare my intention to stand for the position of managing director of the IMF," Ms. Lagarde told reporters at a press conference.

DSK wife: Au revoir, blog fans (NYP)
Dominique Strauss-Kahn's journalist wife, Anne Sinclair -- dubbed the French Barbara Walters -- has pulled the plug on her popular blog. "You will understand the circumstances that have forced me to temporarily suspend this blog," Sinclair posted Monday in French on her blog "Two or Three Things Seen in America," where she has been chronicling her take on US politics and other events since 2008. "All I can say is, see you soon."

Stroz Friedberg Builds Bodyguard Business With Madoff, Strauss-Kahn Cases (Bloomberg)
The job, which will pay Stroz Friedberg about $200,000 a month according to estimates provided to the court, is the latest high-profile assignment for the firm, which managed the house arrest of Madoff two years ago. While “muscle” is important, [Edward] Stroz said he isn’t just in the business of renting “bodyguards.” For Madoff, there were legitimate concerns he might commit suicide, as well as whether defrauded investors might try to kill him.

AIG, Treasury Score Small Gain in Re-IPO (WSJ)
AIG and the Treasury sold 300 million shares at $29 apiece, putting U.S. taxpayers in line to recoup at least $5.8 billion and reducing the government's stake in the insurer to 77% from 92%. More shares may be sold in the coming days, which could lower U.S. ownership in AIG to around 74%.

G.O.P. Lawmakers Vote to Delay Derivatives Rules (DealBook)
A House panel approved a plan on Tuesday to delay several rules for the $600 trillion derivatives market, a leading player in the financial crisis. The bill would freeze crucial regulations stemming from the Dodd-Frank Act until September 2012, more than two years after the law was enacted and 14 months after the rules were scheduled to take effect.

GM Falls Out of Favor With Hedge Funds (Bloomberg)
General Motors Co., one of the 10 most popular stocks for hedge funds at the end of last year, fell out of favor in the first quarter as slower growth in China and discounts in the U.S. dimmed the automaker’s prospects. Bill Ackman’s Pershing Square Capital Management LP, Barry Rosenstein’s Jana Partners LLC and David Tepper’s Appaloosa Management LP were among the 49 hedge funds who sold their entire GM stakes as of March 31, according to regulatory filings compiled by Bloomberg. In total, 81 hedge funds sold GM in the quarter, including Daniel Och’s Och-Ziff Capital Management Group LLC and George Soros’s Soros Fund Management LLC.

Two More Air-Traffic Controllers Caught Sleeping (Bloomberg)
Two more U.S. air-traffic controllers were caught sleeping in January at their posts in Los Angeles and Fort Worth, Texas, Federal Aviation administration chief Randy Babbitt told reporters.

Mortgage Securities on a Roll in 2011 (WSJ)
Banks have issued about $9.6 billion in CMBS so far this year, according to Commercial Mortgage Alert, a publication that tracks the market. Based on deals in the pipeline, analysts expect that they will see roughly $40 billion to $50 billion by year's end, up from about $12 billion in 2010 and a mere $3 billion in 2009. Still, the CMBS sector's presence is a faint one when compared with the peak of 2007, when $230 billion was issued.

Lawmakers Concerned About Ex-IMF Director's 'Golden Parachute' (FN)
The former head of the International Monetary Fund accused of sexually assaulting a New York hotel maid will receive a $250,000 severance payment -- paid in part courtesy of the American taxpayer -- unless U.S. lawmakers can stop the "golden parachute" from landing in the French politician's bank account.

Key role for Buffett over utility’s fate (FT)
Energy Future is seeking to refinance about $4.6bn in bonds used for the buy-out as it seeks to address financial difficulties created in recent years by sharp falls in the price of natural gas, which serves as a benchmark for utility rates in Texas…The result is a high stakes negotiation that will pit Mr Buffett against some of the most powerful figures in private equity – David Bonderman of TPG, and Henry Kravis and his cousin George Roberts, one of the founders of KKR.

FSA gives rogue trader £1.09m fine for share ramping (Guardian)
The Financial Services Authority (FSA) has fined the stock market trader Samuel Nathan Kahn £1.09m for share ramping just three years after it bankrupted him for his part in a "boiler-room" scheme. But despite abuses that included impersonating share buyers and artificially inflating share prices, the regulator said there was not enough evidence to secure a criminal conviction. Kahn has agreed to pay the fine.

S.E.C. Leased Unneeded Space, Report Says (NYT)
The Securities and Exchange Commission leased $556 million worth of office space last year based on a “deeply flawed and unsound analysis” of its needs, without competitive bids and using backdated approval forms to justify its rushed attempt to rent the offices, according a report by the agency’s inspector general released Tuesday.

U.K. Economy Grew 0.5% in First Quarter (Bloomberg)
Exports rose 3.7 percent in the quarter and net trade added a record 1.7 percentage points to gross-domestic-product growth, the Office for National Statistics said today in London. Consumer spending dropped 0.6 percent and company investment plunged 4.4 percent. GDP rose 0.5 percent on the quarter and 1.8 percent from a year earlier, matching initial estimates.

S&P says may boost Brazil's sovereign credit rating (Reuters)
S&P revised its outlook on Brazil's foreign currency sovereign credit rating to "positive" from "stable," raising the prospect of reduced costs when the country sells government debt abroad. The ratings agency cited Brazil's prospects for steady, long-term economic growth, and said its modest current account and fiscal deficits should reduce its vulnerability to negative external shocks -- a contrast to some countries in Europe.

Greek restructuring may not spark Irish downgrade -S&P (Reuters)
Ratings agency Standard & Poor's would not automatically downgrade Ireland if Greece was to restructure its sovereign debt, the agency's lead analyst for Ireland told Reuters on Wednesday. Rival agency Moody's on Tuesday warned of a chain reaction of severe consequences for the 17-nation euro area if Greece was allowed to default next month, saying Portugal and Ireland could be downgraded from investment-grade to junk.

Irish Banks Shed U.S. Loan Holdings (WSJ)
Under pressure to reduce its holding of troubled loans, Allied Irish Banks PLC has struck a deal to sell a portfolio of roughly $1 billion in U.S. commercial mortgages to Blackstone Group LP and Wells Fargo & Co., according to people familiar with the matter. The sale by Allied Irish, which was effectively nationalized after its near-collapse during the financial crisis, is part of a move by Irish banks to take advantage of a recovery in U.S. commercial property to shrink their holdings of troubled loans.

Kathryn Bigelow's Navy Seal Team 6 Film to Hit Theaters in 2012 (Hollywood Reporter)
Columbia Pictures has picked up the U.S. distribution rights to Kathryn Bigelow and Mark Boal’s project regarding Navy Seal Team 6 and its hunt for Osama Bin Laden. The duo behind the Oscar-winning thriller The Hurt Locker have been working on the project for some time and were eyeing a summer start when real life events -- Bin Laden’s killing by the black ops team -- overtook the project. Boal is incorporating the latest developments into the script.

Related