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Opening Bell: 07.01.11

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Timothy Geithner wants to leave White House in fall (Politico)
Possible replacements to be President Barack Obama’s top economic adviser, the official said, include Erskine Bowles, White House chief of staff under President Bill Clinton, and Roger Altman, a prominent investment banker and former deputy Treasury secretary. Jamie Dimon, chief executive of JPMorgan Chase, is considered a strong dark-horse candidate. Dimon has said he is not interested in public office but many on Wall Street believe he would accept the job if asked by Obama. But the White House will have to decide whether Dimon, who leads the most successful bank in the U.S., is too closely aligned with Wall Street…Other names mentioned as possible replacements for Geithner include outgoing FDIC Chair Sheila Bair, New York City Mayor Michael Bloomberg and General Electric CEO Jeff Immelt.

Strauss-Kahn Case Seen as in Jeopardy (NYT)
The sexual assault case against Dominique Strauss-Kahn is on the verge of collapse as investigators have uncovered major holes in the credibility of the housekeeper who charged that he attacked her in his Manhattan hotel suite in May, according to two well-placed law enforcement officials…Since her initial allegation on May 14, the accuser has repeatedly lied, one of the law enforcement officials said…According to the two officials, the woman had a phone conversation with an incarcerated man within a day of her encounter with Mr. Strauss-Kahn in which she discussed the possible benefits of pursuing the charges against him. The conversation was recorded. That man, the investigators learned, had been arrested on charges of possessing 400 pounds of marijuana. He is among a number of individuals who made multiple cash deposits, totaling around $100,000, into the woman’s bank account over the last two years.

News of Turnaround in Dominique Strauss-Kahn Case Stuns France (NYT)
“I am a happy man, happy for him and for our country,” Jack Lang, a former Socialist culture minister who has ardently supported Mr. Strauss-Kahn since the accusations emerged, said on French television…If the charges against Mr. Strauss-Kahn are dropped, he could still return to France to play a pivotal role in the upcoming presidential elections, Mr. Lang said.

Greece to Receive Up to $124 Billion in New Aid (Bloomberg)
Greece may receive as much as 85 billion euros ($124 billion) in new financing, including a contribution from private investors, in a second bailout aimed at preventing default and ending the euro-region’s debt crisis, according to an Austrian Finance Ministry official…The International Monetary Fund will put up 30 percent of the new funds, with euro-region countries and private investors contributing the remaining 70 percent, Wieser said.

Growth fears spark commodity withdrawals (FT)
Investors pulled almost $7bn from commodity markets in May, according to Barclays Capital, the largest move out of the asset class since the financial crisis…Investors have become increasingly unsure about the outlook for commodities amid signs that tighter credit conditions are holding back growth in China, while high energy prices and the spectre of sovereign default have knocked US and European growth.

US banks warned against shedding risk staff (FT)
US regulators are warning banks to protect their risk-management staff and systems from any planned cost cuts as Wall Street grapples with a challenging year of meager results.

Paulson Urged BofA to Fight Investor Claims (WSJ)
Months before Bank of America Corp. began negotiating a settlement with large holders of mortgage-backed securities, hedge-fund manager John Paulson told senior executives not to give in to such demands, according to people familiar with the situation. In one meeting last fall, Mr. Paulson, one of the bank's largest shareholders and a man who had made billions betting against risky mortgage-related debt, laid out a roadmap for fighting one group of prominent institutional investors.

Extra Einhorn innings (NYP)
The hedge-fund manager and the cash-strapped Mets owners, Fred Wilpon and Saul Katz, were expected to wrap up the $200 million deal for a 33 percent piece of the franchise by June 30 but the two sides, sources said, are still haggling.

Weber named next UBS chairman (FT)
Axel Weber is to be the next chairman of UBS, resolving succession issues at the Swiss banking group and removing any possibility the former Bundesbank president might take a top executive role at Deutsche Bank.

Goldman’s Central Bank Connections Deepen (Bloomberg)
The fifth-biggest U.S. bank by assets said yesterday it hired Bank of England economist Andrew Benito after recruiting Huw Pill from the European Central Bank in May and Naohiko Baba from the Bank of Japan in January. Moving in the other direction, Ben Broadbent, Goldman Sachs’s ex-chief U.K. economist, started at the Bank of England last month. Former vice chairman Mario Draghi will take up the presidency of the ECB in November.

Blackstone takes on £1.4bn of RBS debt (FT)
Royal Bank of Scotland is to offload £1.4bn of high-risk UK commercial property loans into a structure controlled by Blackstone, the private equity group, as it works through the legacy of profligate lending during the boom years of the market.

U.S. Charges 5 in Frauds Involving Penny Stocks (Reuters via NYT)
Three chief executives and two stock promoters were charged Thursday in federal court with engaging in fraudulent penny stock schemes, federal investigators said Thursday.

Citi in Talks to Sell Consumer Finance Unit (WSJ)
Citigroup Inc. has entered into exclusive talks with one bidding group for the long-delayed sale of its OneMain consumer financial services business formerly known as CitiFinancial, according to a person familiar with the sale.

New York Fed Halts AIG Bond Auctions on Market Conditions (Bloomberg)
The Federal Reserve Bank of New York is halting its sales of mortgage bonds acquired in the rescue of American International Group Inc. (AIG) after coming under criticism that auctions were damaging credit markets.

Queen to profit from income shake-up (FT)
George Osborne, the chancellor, has proposed to do away with government grants to the royal household – first introduced in 1760 when George III agreed to transfer income from Crown lands to the government. They will be replaced with a 15 per cent share of the profit that the Crown Estate pays into national accounts. This would put the royal family in line to earn about £34m ($55m) from the property portfolio when the first payment is made in April 2013, roughly the same amount it received from government last year.

Two PMIs Show China's Manufacturing Continues To Slow in June (DJ via WSJ)
The official Purchasing Managers Index fell for the third straight month to 50.9 last month from 52.0 in May. Meanwhile, the HSBC China Manufacturing PMI fell for the second consecutive month to an 11-month low 50.1 in June from 51.6 in May.

Minnesota government shuts down as budget talks stall (CNN)
The Minnesota government was forced to shut down for the second time in six years after lawmakers failed to meet a budget agreement Thursday before a midnight deadline.

Italian police arrest Corleone mafia boss (AFP)
Italian police on Friday announced the arrest of the 79-year-old mafia boss of Corleone -- the Sicilian hilltop town made famous by "The Godfather" trilogy -- following a three-year investigation.