Top Interest Rate Headlines 05-10-11: Link Between Weak Dollar, Inflation Is Eroding

Link Between Weak Dollar, Inflation Is Eroding
By Kathleen Madigan, WSJ.com
Currency weakness leading to higher import prices is a hallowed cause-effect connection for economists. But it’s a link that may be eroding.
http://jlne.ws/isQJCt

AIG board set to decide on share offering
By Alistair Barr, MarketWatch
American International Group’s board of directors will decide later Tuesday whether to go ahead with a much-anticipated share offering, a person familiar with the situation said.
http://jlne.ws/lc9W5W

Cash market betting on high demand for 10-years
By Emily Flitter, Reuters
An early indicator in the
short-term rates markets is pointing to strong demand for the 10-year Treasury note issue to be auctioned on Wednesday at 1 p.m. EDT (1700 GMT).
http://jlne.ws/mSFfDB

Roubini’s guide to a Greek debt restructuring
FT.com
It’s a ‘how-to’ manual for a Greek debt restructuring from Nouriel Roubini (plus Arnab Das, Jennifer Kapila, James Mason, David Nowakowski, Elisa Parisi-Capone and Christian Menegatti of Roubini Global Economics). The whole thing is well worth a read, but here are the key points.
http://jlne.ws/lICQFn

Regulators probe Goldman analyst communications
Reuters
Massachusetts securities regulators may charge Goldman Sachs Group Inc (GS.N) with improperly passing along analysts' tips to top clients.
http://jlne.ws/jxrnzz

Paulson Plays the Lehman Bust
BY MATT WIRZ, MIKE SPECTOR AND TOM MCGINTY, WSJ.com
Hedge-fund manager John Paulson made $4 billion betting against subprime mortgages, the market that ultimately helped destroy Lehman Brothers Holdings Inc. Now, his fund is poised to make hundreds of millions picking through the investment bank's remains.
http://jlne.ws/iOR1xt

LCH Clearnet raises the margin on Portugal bonds from 35% up to 45%
In accordance with the Sovereign Credit Risk Framework and in response to the yield differential of 10 year Portuguese government debt against a AAA benchmark, LCH.Clearnet Ltd has revised the risk parameters for Portuguese government bonds cleared through the RepoClear service.  The additional margin required for positions of Portuguese government bonds will consequently be increased from 35% to 45% for long positions; this amount will be adjusted for the current bond price*.  Short positions will pay a proportionately lower margin.
http://jlne.ws/kJBrfP

London's fate rests on who wins NYSE
FT.com
The battle to takeover NYSE Euronext has a crucial bearing on the future of London as a global financial centre. Lynton Jones, chairman of Bourse Consult, explains to Jeremy Grant, why he thinks the Nasdaq/ICE deal will be beneficial while the Deutsche Börse bid would erode London's standing.
http://jlne.ws/lpt2C8

U.S. Republicans Seek Review of Dodd-Frank Act Regulatory Costs
By Silla Brush
U.S. Senate Republicans asked the internal watchdogs at five financial regulators to investigate the economic impact of rules proposed under the Dodd-Frank Act. Inspectors general at the Federal Reserve, Commodity Futures Trading Commission, Securities and Exchange Commission, Federal Deposit Insurance Corp. and Treasury Department should review the economic analysis of more than a dozen proposed Dodd- Frank rules, including margin and capital requirements in derivatives trades and retention of risk in securities backed by residential, commercial and other loans.

S&P moves to cut Greek credit rating
By Richard Milne, Tracy Alloway and Ralph Atkins, Financial Times
Standard & Poor’s has cut Greece’s credit rating by two notches, warning that any voluntary debt restructuring by Athens would amount to a default.
http://jlne.ws/jmj2ZU

Dodd-Frank Dissenters Sound Off
By ANDREW ROSS SORKIN, NY Times
The irony was thick. Alan Schwartz, the former chief executive of Bear Stearns who oversaw its near-demise and subsequent government-aided rescue, was here at Michael Milken’s annual conference — a West Coast version of Davos for financiers — moderating a panel last week about whether the Dodd-Frank Act had ended “too big to fail.”
http://jlne.ws/lgJlpE

Global colonisers stage retreat to corporate banking
By Patrick Jenkins, Financial Times
Is the era of the global consumer bank over? HSBC has become the latest group to signal a retreat from some of its furthest-flung retail banking operations. Recently it said it was pulling out of Russia and in Monday’s quarterly results it took a chunky restructuring charge in Latin America, partly relating to “branch rationalisation”.
http://jlne.ws/kurJhC

Jonathan W. Hitchon of Deutsche Bank Named to DTCC Board
Business Wire
NEW YORK--(BUSINESS WIRE)--Jonathan W. Hitchon, co-head of Deutsche Bank's Global Prime Finance business, has been elected to the Board of Directors of The Depository Trust & Clearing Corporation (DTCC).
http://jlne.ws/kKQHpf

Goldman Sells First Kangaroo Bonds in 5 Years: Australia Credit
BusinessWeek
Goldman Sachs Group Inc. is returning to Australia's bond market for the first time since 2006 to take advantage of relative yields on financial debt hovering at about the lowest level in three years.
http://jlne.ws/kefyWL

BofA to cut $850bn bad loan book in half
By Suzanne Kapner and Justin Baer in New York, Financial Times
Bank of America plans to shrink its $850bn portfolio of troubled home loans by about half over the next three years as it seeks to quicken the pace with which it resolves problems related to the housing crisis and its disastrous purchase of Countrywide Financial.
http://jlne.ws/kNUR8d

The mystery of RBS's £500m charge
eFinancial News
When it announced its first quarter loss of 116m last week, the Royal Bank of Scotland revealed it had been hit by a charge of nearly half-a-billion pounds which ultimately proved to be the difference between it making a profit and the loss.
http://jlne.ws/lrfPhZ

Morgan Stanley eyes Saxon sale
New York Post
Morgan Stanley is considering offloading its mortgage-servicing arm, Saxon Mortgage Services, The Post has learned. The investment bank run by CEO James Gorman acquired the mortgage company at the height of the housing boom in 2006, and is weighing a sale in order to streamline its business and jettison assets...
http://jlne.ws/j3ow5P