Eurozone delays €12bn loan for Greece (FT)
Eurozone finance ministers on Monday failed to commit to a critical €12bn aid payment to Greece, instead vowing to wait until Athens passed a controversial austerity package before signing off on the loan disbursement. The decision to delay a sign-off on the payment turns up the pressure on the Greek parliament to pass €28bn in spending cuts and tax increases, agreed to with international lenders last month. The austerity package has led to protests and riots in Athens, and the Greek government faces collapse if it cannot get backing for the new measures in a confidence vote scheduled for Tuesday.

Britain Will Stay Out Of New Greek Bailout (Sky News)
Ahead of today’s meeting, Chief Secretary to the Treasury Danny Alexander set out the UK argument on Sky News. He said: “It’s the eurozone that is taking forward discussions now about the next stage of dealing with Greece’s substantial problems… There’s simply no proposition on the table for the UK to contribute beyond International Monetary Fund involvement and I don’t expect there to be one.”

EU warns Ireland over banking plan (FT)
Ireland’s plans to base its banking system around Bank of Ireland and Allied Irish Banks could hamper competition and must only be a short-term solution, the European Union’s competition commissioner has warned. The comments were made as Bank of Ireland’s efforts to raise €4.2bn ($6bn) in fresh capital came under attack after a group of its junior bondholders filed a lawsuit in London claiming the bank was acting beyond its powers in a debt-for-equity swap it launched this month.

Greek Default Would Spell ‘Havoc’ for European Banks a Year After Bailout (Bloomberg)
“The Greek debt situation certainly has the potential to create havoc with the European banking system,” said Neil Phillips, a fund manager at BlueBay Asset Management Plc in London, which oversees about $45 billion. “A Greek default and the ramifications of that would be too ghastly for Europe and the European banking system to contemplate right now.”

Goldman Cuts GDP View to 2% as Economy Weakens (CNBC)
Faced with the bruising headwinds of high unemployment, weak manufacturing and an otherwise listless economy, Goldman Sachs has slashed its forecast for gross domestic product. The firm cut its second-quarter GDP outlook to 2 percent from 3 percent, a stunning blow for an economy expected to be well on the path to recovery following the financial crisis of 2008 and 2009.

Commodities out of favour (FT)
Commodities have fallen sharply out of favour among institutional investors in the past three months, according to a Barclays Capital survey. Just 15 per cent of nearly 900 respondents expect commodities to be the best performing asset class in the coming three months, down from 41 per cent previously.

Permal Says It Won’t Have Trouble Paying Investors in Market Crunch (WSJ)
A $23 billion hedge-fund firm is seeking to reassure investors as two securities brokerages question its ability to meet redemptions quickly in two funds during a market crunch. New York-based Permal Group on June 8 sent a letter to clients at Bank of America Merrill Lynch seeking to calm them after Citigroup Inc.’s private bank recommended its bankers put no new client money into one of its hedge funds and pull clients’ money from a second, people familiar with the matter said. Morgan Stanley Smith Barney on Thursday put one of the same Permal funds on its watch list, discouraging new investors from putting money into it, people familiar with the action said.

Key partner casts doubt on Sino-Forest claim (Globe and Mail)
The company says it has fulfilled virtually all of the agreement with Gengma and now owns more than 200,000 hectares in Yunnan. But officials with Gengma Forestry, including the chairman, dispute the company’s account of the deal, telling The Globe and Mail that the actual numbers are much smaller. Xie Hongting, the chairman of Gengma Forestry, said in an interview that the transactions carried out so far by Sino-Forest amounted to less than 14,000 hectares.

Hold It! Weiner Not Gone (NYP)
Although the randy rep. announced Thursday that he was quitting after seven terms, he still has to submit a resignation letter to House Speaker John Boehner that says which day will be his last serving his Brooklyn-Queens constituents. Continue reading »

$$$ Euro Strengthens After Germany’s Merkel Agrees to a Greek Debt Compromise (Bloomberg)

$$$ Echoes Of Lehman: World Awaits Another High-Stakes Weekend (MarketBeat)

$$$ Howard Marks was failing miserably. It was 1977, and the research group he oversaw at Citibank had recommended Nifty 50 stocks that lost 90 percent of their value over the previous decade. Then Peter Vermilye, Citibank’s chief investment officer, gave Marks an option: He could quit research and start a fund focusing on convertible bonds, a niche where neither the New York bank nor Marks had any experience. He jumped at the chance. “It changed my life,” says Marks, who with his light-brown tortoiseshell glasses and spiky, sandy-colored hair looks younger than his 65 years. “If he hadn’t pushed me out of the research job, where would I be today?” (Bloomberg)

$$$ IMF Cuts Forecast for U.S. Growth Again Amid Risk of Contagion From Europe (Bloomberg)

$$$ Goldman’s Jim O’Neill Says Greek Default Closer (Reuters)

$$$ Top of the Greek bond exposure pops (FT Alphaville)

$$$ US banks seen skirting Greek drama; exposure small (Reuters) Continue reading »