Opening Bell: 06.29.11

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Greek lawmakers seen backing austerity despite violence (Reuters)
Greece's parliament looked increasingly likely to approve unpopular austerity measures on Wednesday, despite renewed violence, to secure international funds to prevent the euro zone's first sovereign default. But with the country on the brink of bankruptcy, it remains uncertain whether a weakened Socialist government can push through laws to implement structural reforms and privatisations in a second series of votes on Thursday, and then stick to a tight EU/IMF-imposed schedule for implementation.

Markets Rise on Optimism About Greek Vote (NYT)
Asset prices were mostly higher in Europe on Wednesday as investors bet that the Greek Parliament would support an austerity plan demanded by international lenders as a condition for providing more funds and preventing a default.

Greece faces ‘suicide’ vote on austerity (FT)
Greece will be committing “suicide” if its parliament fails to back sweeping austerity measures aimed at averting a catastrophic default, according to the head of the country’s central bank.

In a Greek Default, Higher Risk for Money Market Funds (NYT)
For years, the funds in the United States have taken investors’ money and lent it out where they can get the best returns. European banks have been a target lately — so much so that about 50 percent of the funds’ $1.6 trillion in prime money market assets is in the debt of European banks. Now that Europe is struggling to contain its debt crisis, these safe investments could be a tad less safe, especially if Greece’s Parliament votes down a set of deeply unpopular austerity measures Wednesday morning.

BofA Agrees to Pay $8.5 Billion in Settlement (Bloomberg)
Bank of America agreed to pay $8.5 billion to settle claims over soured mortgages after a group of bondholders including BlackRock demanded refunds…Investors, which also include Pacific Investment Management Co. and the Federal Reserve Bank of New York, demanded in October that Bank of America repurchase home loans that had been packaged into bonds by Countrywide Financial Corp., which it acquired in 2008.

Wall Street Wielding the Ax (WSJ, Dealbreaker, Dealbreaker)
Credit Suisse Group AG started laying off investment-banking employees Tuesday, and the cost-cutting push could claim 400 to 600 jobs, according to people familiar with the situation. This month, Barclays PLC has eliminated 100 jobs in its investment bank, including some stock-trading employees. The latest cuts are on top of 600 layoffs in January, a person familiar with the situation said.

Morgan Stanley Said to Suffer Trading Loss (Bloomberg)
The bank’s interest-rates trading group lost at least tens of millions of dollars on the trade, which the firm has been unwinding, two of the people said, declining to be identified because the transaction isn’t public.

Larry Fink Wants To Be 100% In Stocks (CNBC)
"I am not afraid of treasurys but if my accountants would allow me I would be 100 percent in equities," Fink said. "Equities are historically cheap, but people are still going out of equities and paying 2 and 20 (for hedge fund exposure) and hoping for better returns than on equities. Anything earning 3 percent or lower is the dumbest thing you can do," he added. "If we went on holiday four years ago and came back better human beings with a tan, markets would still be back where they were four years ago."

Buffett’s Forgotten $20 Helps Californians Bridge State’s $10 Billion Gap (Bloomberg)
California Controller John Chiang has $20 for Warren Buffett. There’s also more than $10,000 owed to director Steven Spielberg, part of a $6.1 billion cache of dormant savings accounts, store credits and forsaken royalty payments that has only grown since 2007 when Chiang, a 48-year-old Democrat, took steps to return more unclaimed property to owners…The boom is a boon for California’s general fund, where the stray cash is deposited and used as a sort of no-interest loan to pay salaries and expenses -- a cushion that has helped keep the state afloat while state politicians wrestled over a $10 billion budget deficit, the largest in the nation.

Basel Regulators to Check Banks’ Risk Models (Bloomberg)
Now regulators are preparing to assess how banks set risk weightings amid criticism firms’ calculations are inconsistent, said a person with direct knowledge of the matter who declined to be identified because the talks are private.

UBS, Other Banks Can Sue MBIA Over Restructuring (Businessweek)
UBS AG, Bank of America Corp. and about a dozen other banks won reinstatement of a lawsuit against MBIA Inc. challenging the 2009 restructuring of its insurance unit that guaranteed toxic debt. The state Court of Appeals in Albany, New York’s highest court, announced its decision today, overturning a lower-court ruling.

Treasury Assails OCC on Draft Rule (WSJ)
The Treasury Department criticized a fellow regulator for violating the intent of Congress's financial-regulation overhaul, saying a draft rule provides national banks too broad a shield from state consumer-financial laws.

Dodd-Frank Rekindles Old Debate (NYT)
At issue is whether state banking regulators will be undercut by their federal counterparts when it comes to consumer financial protection laws. Banks, state regulators and consumer advocates have been sparring in legalese-filled comment letters over the last month in response to rules proposed by the Office of the Comptroller of the Currency, which regulates national banks.

Danish Banks Face International Funding Wall (Bloomberg)
Denmark’s mid-sized banks face reluctance from international investors to buy their bonds after a second regional lender failed this month, triggering Europe’s toughest resolution rules.

Buffett-Backed BYD Slumps in Hong Kong After Profit Drops 84% (Bloomberg)
The Shenzhen-based company fell as much as 7 percent, after declining sales and a jump in financing expenses dragged first- quarter net income to 266.7 million yuan ($41 million) from 1.7 billion yuan a year earlier.

The Glencore lovefest (FT Alphaville)
The IPO research blackout on Glencore International has been lifted this Wednesday, which means the investment banks responsible for the UK’s latest IPO flop are now free to heap praise on the commodities trading house.

Goldman Sachs’s Kirsch Retires From Managing $75 Billion of Insurer Assets (Bloomberg)
Goldman Sachs Group Inc. (GS)’s Eric Kirsch plans to retire as global head of insurance asset management, a position that involved overseeing $75 billion for clients, according to a company spokesman.

Bidding for Myspace comes down to two suitors (LA Times)
Orange County advertising network Specific Media and Bay Area private equity firm Golden Gate Capital are finalists in the bidding for struggling social network Myspace, people familiar with the matter confirmed. News Corp. had hoped the once-dominant Myspace would fetch as much as $100 million, but bidding is in the range of $20 million to $30 million in cash and stock, said the people, who declined to be identified because talks are confidential.

Pope Benedict XVI Writes His Very First Tweet (Time)
For the first time, His Holiness the Pope has made a Twitter footprint. Make that a fingerprint, since he pushed click himself to send the very first Papal tweet this afternoon. Short and sweet, his message even had 23 characters to spare: "Dear Friends, I just launched News.va Praised be our Lord Jesus Christ! With my prayers and blessings, Benedictus XVI."

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