S&P: Risk of U.S. Credit Rating Downgrade Increased (Reuters)
The risk of a downgrade to the credit rating of the United States has increased due to a lack of political consensus on how to employ the country's balance sheet flexibility, Standard and Poors' said on Tuesday.
Fitch sees risk of Greece, U.S. debt defaults (Reuters)
Fitch Ratings said on Tuesday that it would regard a voluntary rollover of Greece's sovereign bond maturities as a default and would cut the credit rating appropriately, keeping pressure on Athens ahead of a confidence vote in parliament… Fitch's Colquhoun also reiterated that the rating agency would place the U.S. sovereign rating on watch negative if Congress did not raise the federal government's borrowing ceiling by August 2, and said if the U.S. government misses an August 15 coupon payment, then Fitch would place the rating on restricted default.
Vote of Confidence Is Only the First Step for Greece (NYT)
The payment of 12 billion euros will help Greece pay its debts coming due only until September. After that, Greece still faces obstacles to winning tens of billions more in a much bigger bailout package that is essential to its survival through next year. It has to persuade private banks and other companies that hold its government debt to take part in the bailout by agreeing to lend the country the same amount of money again after their bonds are redeemed. Only then will other European countries and the International Monetary Fund agree to put up their share of the new bailout.
IMF says board to meet June 28 to select new chief (Reuters)
The International Monetary Fund said on Monday its executive board will meet on June 28 to discuss the strengths of the two candidates for managing director, with the aim of completing its selection by June 30.
Director or No, Wall Street’s Newest Cop Is Ready for Duty (DealBook)
On July 21, the [Consumer Financial Protection Bureau] will formally open its doors and will be able to send its examiners into Goldman Sachs, JPMorgan Chase and other financial titans — whether or not it has a director. It can also issue new rules for big banks, examine their books and file enforcement actions, all crucial steps for an agency that was born only a year ago.
Paulson May Deal Clients $720 Million Loss (Bloomberg)
Paulson & Co., which held 34.7 million shares of Sino- Forest as of April 29, said in a filing yesterday that it had disposed of the stake as of June 17. The New York-based firm’s holding was worth C$815.80 million when it was disclosed. Its value had dropped to C$110.69 million by the end of last week.
Muddy Waters Target Urges Action (Bloomberg)
Orient Paper Inc. (ONP), a target of short-seller Muddy Waters LLC last year, urged overseas-listed Chinese companies to increase transparency after its shares fell 60 percent following the critical report. After the Muddy Waters June 28 analysis that labeled Orient a fraud, the company appointed Loeb & Loeb LLP, Deloitte & Touche Financial Advisory Services and TransAsia Layers to probe the allegations. That four-month investigation found no evidence to support the short-seller’s claims.
Key Banker Leaves UBS (WSJ)
Moelis & Co. on Tuesday said it has hired Liam Beere from UBS AG to head its mergers-and-acquisitions advisory in Europe, Middle East and Africa, in the latest blow for UBS after a rash of departures by other senior bankers. Moelis said Mr. Beere will join Sept. 19 and will be based in London as a managing director. He had worked for UBS for 19 years, most recently as global head of M&A.
WaMu Trust Preferred Holders Seek to Join Probe of Hedge Funds’ Trading (Bloomberg)
A group of Washington Mutual Inc. (WAMUQ)’s creditors, including Black Horse Capital, is seeking to join a probe of four hedge funds accused of using confidential data to trade in the debt of the bankrupt former bank holding company…Common shareholders and the trust preferred holders are among the last opponents to WaMu’s $7 billion reorganization proposal, which was crafted with help from the four hedge funds, Centerbridge Partners LP, Appaloosa Management LP, Owl Creek Asset Management LP and Aurelius Capital Management.
HK regulator thwarted in attempt to ban Tiger Asia from trading (Reuters)
A Hong Kong court ruled on Tuesday that it does not have the jurisdiction to determine whether New York-based hedge fund Tiger Asia engaged in insider dealing, thwarting the market regulator's attempt to ban the fund from trading securities or derivatives listed in the city.
Hedge funds gather net $8.1 billion in May (Reuters)
Hedge funds gathered a net $8.1 billion in May, recording their sixth consecutive month of positive flows, a research report from industry tracker Eurekahedge showed on Tuesday.
Courts rule BofA must face suits (NYP)
Two federal judges have ordered Bank of America to face lawsuits accusing the largest US bank of misleading investors about mortgage-backed securities…The plaintiffs contended that BofA engaged in "dollar rolling," in which it concealed risk by transferring mortgage debt to another entity with an understanding that it would buy the debt back after issuing its quarterly financial statement.
California Couple Pleads Guilty to Hiding Swiss UBS Bank Account From IRS (Bloomberg)
A California couple who own and operate a school for test pilots pleaded guilty to hiding their Swiss bank account with UBS AG as well as other offshore bank accounts from the U.S. Internal Revenue Service. Sean and Nadia Roberts of Tehachapi, California, pleaded guilty to filing a false tax return, the Justice Department said today in a statement. Under the plea deal, they agreed to pay the IRS $710,000 in restitution. They face as long as three years in prison at their sentencing on Sept. 6, according to the statement.
Lending Battle Is Risky Business (WSJ)
Banks and other lenders are engaged in an increasingly pitched fight for some corporate borrowers, raising concerns among analysts and regulators that the banks aren't charging enough to cover the risk they are taking on.
Stanford’s Investment Chief Frier Leaves After Less Than a Year (Bloomberg)
Stanford University, the fourth- richest U.S. college, lost its chief investment officer, Ken Frier, after less than one year on the job...Stanford named Frier as CIO in August, filling a position that was open for more than two years…In September, Stanford said its investments rose 14.4 percent in the year ended June 30, on gains in credit investments and stocks. That performance beat Harvard University and Yale University, the two richest U.S. schools. The endowment rose to $13.8 billion in the year ended Aug. 31.
World's oceans in 'shocking' decline (BBC)
The oceans are in a worse state than previously suspected, according to an expert panel of scientists. In a new report, they warn that ocean life is "at high risk of entering a phase of extinction of marine species unprecedented in human history". They conclude that issues such as over-fishing, pollution and climate change are acting together in ways that have not previously been recognised.
Cops: Drunk, naked man operated on pet Doberman (NYDN)
Gibbs told the officers he had been using a butcher knife to remove a cyst from under the dog’s ear, and had turned on the water in the bathtub to clean up the dog, according to police and prosecutors. Gibbs told officers he had been drinking at Trump Tower earlier in the evening, returned to his apartment, had another half-bottle of wine and "proceeded to perform surgery" on his dog, according to a police report.