Opening Bell: 06.20.11

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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.

Many Cities Face a Long Wait for Jobs to Return (NYT)
According to the mayors’ report, which was compiled by IHS Global Insight, the nation’s 363 metropolitan statistical areas tracked by the Labor Department will generate enough jobs to get back to only the prerecession peak of employment in the first half of 2014, a dreary forecast that poses an increasing political challenge to the Obama administration.

Bill Clinton: It’s Still the Economy, Stupid (Newsweek)
Next week in Chicago, the Clinton Global Initiative will focus on America for the first time, inviting business and political leaders to make specific commitments in support of the former president’s jobs blueprint, which he details below.

Japan’s Exports Declined More Than Expected (Bloomberg)
Exports decreased 10.3 percent from a year earlier after April’s revised 12.4 percent drop, the Finance Ministry said today. The median estimate of 25 economists surveyed by Bloomberg News was for an 8.4 percent decline. The nation posted a trade deficit of 853.7 billion yen ($10.7 billion), the second biggest since comparable data were made available in 1979.

Two Teenagers Shot With Rifle In Brooklyn (NYT)
When a group of teenagers began to kick parked cars and rip open bags of garbage on a quiet street in Marine Park, Brooklyn, on Saturday night, a few residents ventured onto their front lawns and yelled at the group to leave. Others stayed indoors and watched from windows. One neighbor, Thomas Dunikowski, 30, went further. A recent arrival on the block, Stuart Street, he got into a scuffle with one of the young men. Then he retreated into the house where he lived with his young family. The next thing the neighbors heard above the shouting of unruly teenagers was rifle fire. From an upstairs window, the police said, Mr. Dunikowski fired a semiautomatic rifle into the street, wounding at least two teenagers on the street below.

Companies Push for Tax Break on Foreign Cash (NYT)
Under the proposal, known as a repatriation holiday, the federal income tax owed on such profits returned to the United States would fall to 5.25 percent for one year, from 35 percent. In the short term, the measure could generate tens of billions in tax revenues as companies transfer money that would otherwise remain abroad, and it could help ease the huge budget deficit.

Carlyle Picks 3 Banks as Underwriters for I.P.O. (DealBook)
As it prepares to go public, the Carlyle Group has picked three banks — JPMorgan Chase, Citigroup and Credit Suisse — to lead its pending initial public offering, people briefed on the matter told DealBook on Friday.

Moody's Cuts Tepco To Junk (WSJ)
Moody's on Monday cut Tepco's long-term issuer rating to B1 from Baa3 and lowered its senior secured rating to Ba2 from Baa2. The move affected more than $65 billion in debt—Tepco said debt amounts affected are ¥5.08 trillion ($63.35 billion), €1 billion ($1.42 billion), and 600 million Swiss francs ($709 million). It added that the ratings remain on review for further possible downgrade.

Upsets hit merger arbitrage investors (FT)
The sector has more than $18bn under management globally. However, in recent weeks several transactions have faltered, dealing a blow to those betting on speedy returns. Heightened equity market volatility has also increased fears that discussions will be shelved and parties will find it harder to agree deals.

In Florida, Banking's Survivors Are Lending (WSJ)
In the first quarter, 29 banks with headquarters in Florida increased their total loan volume by at least 5% compared with the end of 2010, according to the Federal Deposit Insurance Corp. The modest rebound is a contrast to the overall decline of 1.7% in total loans at the nation's 7,574 banks and savings institutions, the fifth-steepest drop in 28 years.

Professor Bernanke Warning of Japan Paralysis Meets Fed Chief Facing Same (Bloomberg)
As a Princeton University professor, Ben Bernanke castigated the Bank of Japan in 2000 for a “case of self-induced paralysis” that led to a decade of stagnation. Now, the Federal Reserve chairman may be allowing the U.S. central bank to fall into the same trap after its second round of quantitative easing ends this month. By all but ruling out another cycle of bond purchases, Fed officials have left themselves with little in the way of policy options to respond to slowing growth and rising unemployment. This raises the risk that the U.S. will remain saddled with what Bernanke himself has called a “frustratingly” sluggish recovery that leaves millions of Americans out of work.

Skype Fires Executives, Avoiding Payouts (Bloomberg)
Skype Technologies SA, the Internet- calling service being bought by Microsoft Corp. (MSFT), is firing senior executives before the deal closes, a move that reduces the value of their payout, according to three people familiar with the matter…The timing of the dismissals means stock options will be worth less than if the executives stayed until the closing of the $8.5 billion deal, the people said.

Investors Provide Millions to Risky Start-Ups (NYT)
Color [a photo-sharing cellphone application] has become a warning sign for investors, entrepreneurs and analysts who fear there is a bubble in start-up investing. They say it shows that venture capitalists, desperate to invest in the next Facebook or LinkedIn, are blindly throwing money at start-ups that have not shown they can build something useful, much less a business that can provide decent returns on investment.

Within the Industry, an Urge to Cash Out (NYT)
“If you’ve seen the world blow up once, you just don’t know what’s going to happen a year from now,” said one former Facebook employee, referring to the dot-com crash a decade ago.

Homeless Utah man found, shocked to hear he's rich (MSNBC)
A private investigator says he has tracked down a homeless Utah man and delivered some good news: He's inherited a lot of money. David Lundberg said he found Max Melitzer pushing a shopping cart filled with personal possessions in a Salt Lake City park Saturday afternoon. Lundberg declined to disclose how much money Melitzer will receive, but said the man's brother died of cancer last year and left him a "significant" amount in his will.

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