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Opening Bell: 06.17.11

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Greek PM Jettisons Finance Minister In Crisis Reshuffle (Reuters)
George Papandreou picked outgoing Defense Minister Evangelos Venizelos as new finance minister, jettisoning George Papaconstantinou, architect of a deeply unpopular belt-tightening program agreed in return for a bailout from the European Union and IMF. Papaconstantinou becomes environment minister in the reshuffle.

Greenspan: Default By Greece 'Almost Certain' (Bloomberg)
“The problem you have is that it’s extremely unlikely the political system will work” in a way that solves Greece’s crisis, Greenspan, 85, said in an interview today with Charlie Rose in New York. “The chances of Greece not defaulting are very small.” The chances of Greece defaulting are “so high that you almost have to say there’s no way out,” said Greenspan. That may leave some U.S. banks “up against the wall.”

Papandreou’s Greek ‘Odyssey’ Challenged by Confidence Vote (Bloomberg)
“His political authority inside Pasok and on the domestic stage has been severely, possibly irreversibly, damaged,” Jens Bastian, a visiting economist at Oxford University, in England, said in an e-mail. “He will not resign, but try to soldier on as long as he is convinced that his reform efforts are worth it and he can command the support of his MPs.”

With China Doubts High, Short-Sellers Descent On Hong Kong (Reuters)
Short-selling in Hong Kong has picked up to levels not seen in about eight months by some measures, with the average daily turnover on the short side this month 35 percent higher than that seen over the past three months.

Raters Draw SEC Scrutiny (WSJ)
SEC officials are focusing on the question of whether the ratings companies committed fraud by failing to do enough research to be able to rate adequately the pools of subprime mortgages and other loans that underpinned the mortgage-bond deals, according to people familiar with the matter...A Standard & Poor's spokeswoman declined to comment. Michael Adler, a spokesman for Moody's, said: "Although Moody's is uncertain as to what The Wall Street Journal is referring, we would certainly cooperate with any requests we receive from the SEC."

Wall Street Eyed In Metal Squeeze (WSJ)
The board of the LME met on Thursday to discuss complaints from aluminum users and market traders, who say operators of warehouses, like Goldman Sachs, J.P. Morgan Chase & Co. and Glencore International PLC, should be forced to allow the metal out more quickly to meet demand.

Madoff Claims Lure Big Banks (WSJ)
The buyers of claims offer defrauded investors who want immediate cash a fraction of what they are owed, intending to profit by collecting a larger payout when the settlement is made final, which can take years. Investors were receiving offers of just 20 cents to 30 cents on the dollar a year ago, when it was unclear how much money would be recovered. Now, with billions already extracted through settlements reached by a court-appointed trustee and the promise of billions more, deep-pocketed banks are moving in, pushing the offers on claims to roughly 70 cents to 75 cents on the dollar. "It's like a circus out there, a feeding frenzy," said Kenneth Krys, a bankruptcy specialist who helped sell the rights to a claim of a fund that lost money with Mr. Madoff and is owed $230 million. "There's people buying and paying quite extraordinary prices." People familiar with the claims market said two banks that are being sued by the Madoff trustee, Swiss firm UBS AG and Royal Bank of Scotland, are among those bidding on claims. By defending the suits, the banks are in effect fighting off victims of the fraud, while at the same time seeking to profit from payouts based on other claims.

Dominique Strauss-Kahn complained about handcuffs, asked 'What for?' in arrest (NYP, WSJ)
According to police statements released for the first time today, the then-head of the International Monetary Fund and French presidential hopeful repeatedly asked officials, "What is this about?" and "What for?" "Is that necessary?" he asked detectives as the cuffs went on at the airport’s Port Authority precinct. Told, "Yes, it is," Strauss-Kahn protested, "But I have diplomatic immunity."...At about 5:10 p.m., he was at the Port Authority precinct, asking to be handcuffed in the front instead of the back. "I need to make a call and let them know I won't be at my meeting tomorrow," he told detectives. "These handcuffs are tight." The document relates sporadic statements by Mr. Strauss-Kahn over the next 24 hours, and requests for coffee, a sandwich and eggs.

UBS Slows Commodities Hiring as Decade-Long Boom Fuels Pay, Drains Talent (Bloomberg)
The Zurich-based bank hired 15 people for commodities this year and for now won’t pursue another 15 positions planned for 2011, Jean Bourlot, the global head of commodities, said in an interview in London. UBS originally wanted to double its commodities staff to 60, he said.
“There is no way we are going to go on a hiring spree,” Bourlot said. “I don’t think that talent pool is that big. People that are good are really expensive. And we want to protect UBS shareholder value by not compromising.”

Protect Your Tail (Forbes)
"We don't care about monthly or yearly or two years of data," says Universa Investments founder Mark Spitznagel, who, clad in button-down blue shirt, khakis and loafers, looks better prepared for a yacht race than for doomsday. "I care about much longer returns, a necessity when dealing with rare events."

Source Of Greek Crisis? A Nation In Denial (Reuters)
In a reaction that is causing frustration and anger abroad, the Greeks seem more inclined to blame others for their troubles than accepting that something is deeply wrong with their country and painful medicine is urgent. "The ordinary people don't understand the seriousness of the situation...not only for Greece, but for the whole world economy," said Jan Randolph, director of Sovereign Risk Analysis at IHS Global Insight.

Swiss Tax Havens Lure Rich From Emerging Markets (Bloomberg)
Customers from developing economies deposited a record 52 percent of the 1.96 trillion francs ($2.3 trillion) held in offshore Swiss bank accounts last year, according to Boston Consulting Group. Their share may climb to 63 percent by 2015 from 37 percent as recently as 2007, the firm said.

Fund Manager: Spanish 'Firewall' Illusion In Danger (CNBC)
"The last thing that financial markets needed this morning was a wobbly Spanish auction, but that’s exactly what they got. Spain’s borrowing costs have soared, with 10 year Spanish government bond yields jumping a massive 20bps at one point," said Mike Riddell in a research note Thursday.

Wall Street Lured By Russian Asset Sales (Bloomberg)
Citigroup Inc.’s Vikram Pandit, Bank of America Corp.’s Brian T. Moynihan, Blackstone Group’s Stephen Schwarzman and Deutsche Bank AG’s Josef Ackermann are among the bankers circling St. Petersburg for the annual economic forum. Medvedev is trying to combat Russia’s reputation as the world’s most corrupt major economy amid investor uncertainty about the future of his ruling tandem with Prime Minister Vladimir Putin.

Kids Lemonade Stand At U.S. Open Fined $500 And Shut Down By Montgomery County (WUSA)
A county inspector ordered the Marriott and Augustine kids to shut down the stand they set up on Persimmon Tree Rd, right next to Congressional. And after they allegedly ignored a couple of warnings, the inspector fined their parents $500.