Opening Bell: 06.06.11

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Goldman Plans to Fight Back Against Senate Report (WSJ)
The securities firm is considering releasing documents about its mortgage bets that are aimed at showing what Goldman officials claim is sloppy math and incomplete analysis by the Senate Permanent Subcommittee on Investigations as the panel sifted through tens of millions of documents turned over by Goldman.

Talk of Changes at Stable J.P. Morgan (WSJ)
Two executives on the New York bank's 15-person operating committee, commercial-banking chief Todd Maclin and top international executive Heidi Miller, are expected to step down from those jobs soon, according to people familiar with the matter. Ms. Miller will likely retire, while Mr. Maclin is expected to take another role within the bank, these people added. Another ally of Mr. Dimon's, investment-bank chief Jes Staley, has faced pointed questions from subordinates about his strategy and priorities, these people said. Mr. Staley has had the job since late 2009, following the acrimonious ouster of the investment bank's two longtime co-chiefs. The unit is the most profitable business at J.P. Morgan...Mr. Dimon has indicated to some colleagues that he might remain CEO for five more years. He also recently made it clear, as a result of urging from J.P. Morgan directors, that the process to pick his successor is under way—and several executives inside J.P. Morgan are essentially auditioning for the top job.

Paulson $9bn hedge fund falls 6% in May (FT)
May’s loss means that in the year to date, the $9bn Paulson & Co Advantage Plus fund is down 7.6 per cent. The average hedge fund lost 1.39 per cent over the month according to preliminary data from Hedge Fund Research, with “event-driven” strategies such as that operated by Paulson & Co’s main fund down on average 0.62 per cent. May was also a painful month for Mr Paulson’s other big investment call: gold.The Paulson & Co Gold fund dropped 6.39 per cent in May, erasing much of its 8.5 per cent April gain. The fund is up 0.9 per cent in the year. Paulson & Co is the world’s largest non-sovereign gold investor. Performance was better for the firm’s other funds. Its Credit fund was down 0.05 per cent for May, while the Recovery fund, which is geared to the prospects of the US economy, dropped 0.69 per cent. Paulson & Co declined to comment.

Strauss-Kahn to plead not guilty to sex charges (Reuters)
Strauss-Kahn, 62, faces up to 25 years in prison if convicted on charges including attempted rape, sex abuse, a criminal sex act, unlawful imprisonment and forcible touching. Former IMF chief Dominique Strauss-Kahn will plead not guilty on Monday to charges he sexually assaulted a New York hotel maid in a case that cost him his job and a chance at the French presidency.

Bulls and Bears in Tug of War on Bank Stocks (WSJ)
The debate: whether bank stocks had finally hit bottom. In front of an audience of investment managers, [Mike Mayo, an analyst at Credit Agricole Securities] argued they hadn't, predicting that bank investors were in for several more years of pain. He compared the U.S. banking industry to Japan, which during the 1990s suffered through a decade of economic malaise. [Richard Ramsden of Goldman Sachs] optimistically pointed to signs of improving credit, increasing bank dividends and stronger bank balance sheets.

The Curious Case of Nelson Obus (DealBook)
Nelson Obus is on no one’s list of Wall Street titans. He is just another guy who chased that golden dream: catch the morning train into Manhattan, run a small but prosperous hedge fund, catch the evening train out, back to a leafy island of suburban wealth. But on the morning of July 11, 2002, a FedEx package from Washington arrived at his Midtown office, and his world collapsed beneath him. Mr. Obus is the target of an insider trading investigation. He insisted from the start that he had done nothing wrong. But, almost a decade later, he is still fighting to clear his name. His case has become one of the longest-running civil actions by the Securities and Exchange Commission in recent memory — a sort of “Les Miserables” of Wall Street. “This has turned into a nightmare,” Mr. Obus, 64, says. He has run up $6 million in legal bills...Mr. Obus could have settled with the S.E.C. He still could. But he insists he will not, despite the urgings of friends and family members. In most cases, people settle without admitting or denying wrongdoing. “That is the same as guilty to me,” Mr. Obus says.

U.S. Profit Forecasts May Be Too Rosy (WSJ)
Even as economic growth projections have been falling, analysts have continued to raise their full-year earnings estimates. In fact, they now expect earnings of nearly $100 per share for the S&P 500 this year, up about $4 since January to a record high.

U.S. Lawmakers Seek Probe of Handling of Madoff Claims (WSJ)
A group of U.S. lawmakers critical of the way money is being recovered from Bernard L. Madoff's giant Ponzi scheme asked a federal watchdog to investigate the industry association overseeing the settlement of victims' claims. Rep. Scott Garrett (R., N.J.), who heads the House Financial Services Subcommittee on Capital Markets, and three of his U.S. House colleagues also want the watchdog to review how the Securities and Exchange Commission has supervised the Securities Investor Protection Corp. in its handling of the claims.

Sino-Forest – a defence (FT Alphaville)
Along with RBC Dominion Securities, Dundee Securities has been the biggest cheerleader for Sino-Forest, the Toronto-listed Chinese forestry operator accused of a massive fraud.

Deal to Sell Goldman Unit Said to Be Near (DealBook)
The bank is near a deal to sell its Litton Loan Servicing unit to the Ocwen Financial Corporation, people briefed on the matter said on Sunday. An announcement could come as soon as Monday, though final details are being worked out. Talks are ongoing and may still collapse. The sale, which would most likely amount to less than $450 million, would provide Goldman an exit from an industry that has come under scrutiny for possible improper foreclosures on homeowners.

Plosser: Stimulus Exit Plan Would Offer Stability (Bloomberg)
“By articulating a systematic plan that gets us to our objective, we improve communication with the public, reduce uncertainty in the marketplace and lend credibility to the commitment that policy makers will follow through,” Plosser said today in Helsinki in the prepared text of a speech.

UN report calls for regulation to curb speculators pushing up food prices (Guardian)
"The changing role of commodity markets, which are turning into financial markets, has enormous repercussions for the economy," said one of the report's authors – Heiner Flassbeck, a director at the UN conference on trade and development (Unctad). "The possibility of allowing governments' direct intervention in the physical and financial markets needs to be considered," the study concluded.

Could Gisele Bundchen Be On Track To Becoming A Billionaire? (Forbes)
Since Forbes began tracking Gisele’s numbers for the Celebrity 100, her estimated total earnings over the last 10 years have passed the $250 million mark. Assuming she’s been managing her cash, spending wisely and making smart investments, the number will likely continue to add up. We know she’s diversified into real estate: her portfolio includes a hotel in the south of Brazil, land in the posh northeast city of Trancoso, Bahia, a villa in Costa Rica and a multi-million dollar house that she is building in Brentwood, CA, with husband Tom Brady. The couple bought the land for $11 million, and are reportedly spending another $20 million to build their dream home facing the Santa Monica Bay all the way to Catalina. According to Jeffrey Hyland, from the brokerage firm Hilton & Hyland (he is partners with Ricky and Barry Hilton, the developers of Brentwood Country Estates), it is safe to say that the property’s range will exceed all its costs once it is ready.

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