Opening Bell: 07.06.11

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Greek Banks Ready for Debt Rollover (Bloomberg)
Greek banks are willing to roll over their government bonds as part of a European Union aid plan, Finance Minister Evangelos Venizelos said, as debt-holders meet in Paris today to discuss their role in rescuing the country.

China Raises Rates to Counter Fastest Inflation Since 2008 (Bloomberg)
The one-year deposit rate rises to 3.5 percent from 3.25 percent, effective tomorrow, the People’s Bank of China said on its website today. The one-year lending rate will increase to 6. 56 percent from 6.31 percent. Today’s move may fuel concern that monetary tightening will trigger a slowdown in the world’s second-biggest economy.

Berkshire Is in Group Bidding on Citi Unit (WSJ)
Warren Buffett's Berkshire Hathaway Inc. is part of a bidding group engaged in exclusive talks to buy the consumer-lending business formerly known as CitiFinancial from Citigroup Inc., said people familiar with the matter. Berkshire rounds out a consortium that includes Centerbridge Partners LP and Leucadia National Corp. bidding for the business, which could fetch more than $8 billion, one of these people said.


Audit watchdog, SEC plan Beijing visit (Reuters)
U.S. regulators, reeling from a series of scandals over U.S.-listed Chinese companies, will head to Beijing to discuss launching audit inspections while regulators in Canada announced a probe of foreign issuers.

White House: Geithner has not told Obama he wants to go (Reuters)
Carney, when asked whether Geithner had told Obama he would like to leave in that timeline, said: "Not that I'm aware of, no. I think he will be here for the foreseeable future."

Bill Calls for Fannie, Freddie Merger (WSJ)
A California Republican is set to introduce a bill as soon as Wednesday to merge Fannie Mae and Freddie Mac and restructure the company into a government-held corporation. It's the latest idea in what figures to be a long, high-stakes drama over what to do with the mortgage giants whose government takeover has put taxpayers on the hook for $138 billion to keep them afloat and stabilize mortgage markets.

Dimon's Global Growth Pains (WSJ)
The New York company's investment bank was No. 1 in global market share in the first half of 2011, leapfrogging over rivals. One reason: As competitors teetered during the financial crisis, J.P. Morgan's last-bank-standing stature lured giant companies. They hoped hiring the bank to underwrite stock and bond deals would be seen as a sign of strength. But a year into a new push for more corporate-loan business outside the U.S. that would help J.P. Morgan reduce the dependence on its saturated, increasingly regulated home country, the company's profits elsewhere slipped in 2010. The bank's global footprint is small compared with Citigroup Inc., which staggered through the financial crisis but gets roughly twice as much revenue outside the U.S. as J.P. Morgan.

Debt Raters Miss Iceland Rebound (Bloomberg)
The credit rating companies that were too slow in predicting Iceland’s economic collapse in 2008 may be underestimating the strength of its resurrection.

European money market funds are hemorrhaging (FT Alphaville)
FYI.

Harbinger Capital's Operating Chief Resigns (WSJ)
Hedge-fund firm Harbinger Capital Partners, founded by Philip Falcone, said Tuesday that Peter Jenson has resigned as chief operating officer and director.

A Pullout by Pensions Hammers a Hedge Fund (WSJ)
In May, executives of FrontPoint Partners LLC were trying to stop the flood of money that was leaving the firm because of an insider-trading scandal when the telephone rang with more bad news. Jim Elkins, an official at Michigan's state pension fund, told FrontPoint it had decided to yank its remaining $375 million investment in the Greenwich, Conn., firm's flagship hedge fund. That was close to one-fourth of all the money left in the shriveled fund.

Germany S&P head rejects criticism of Greek role (Reuters)
"The assertions are completely made up out of thin air and factually wrong. The are either based on ignorance of the facts or are politically motivated comments (that) neglect the facts," Torsten Hinrichs told Austrian radio in an interview aired on Wednesday.

Credit rating agencies place ECB in a bind (FT)
Trying to break an addiction is a tricky business. But the way the financial system is going about ending its unhealthy reliance on credit rating agencies is nothing less than bizarre. The most recent manifestation of this comes from the unhappy situation the European Central Bank finds itself in. Jean-Claude Trichet, ECB president, has been one of many European officials that have regularly railed against the influence of rating agencies, decrying the dominance of Standard & Poor’s, Moody’s and Fitch.

Warning over diverging derivatives rules (FT)
Proposed rules for derivatives trading could push up financing costs and create “material risks” for the global economy because of a lack of co-ordination, the US and European Union have been warned by the financial services industry.

Report: Morgan Stanley warns 34,000 clients of data breach (CNET)
Morgan Stanley Smith Barney has warned 34,000 customers that their addresses, account and tax ID numbers, and other data--including Social Security numbers for some--may have been stolen, the Credit.com news site reported today. The data was reportedly on two CD-ROM discs that were password-protected but not encrypted, according to two letters Morgan Stanley sent to customers on June 24…The state notified Morgan Stanley Smith Barney about the missing CDs on June 8.

Two Sides in Ex-IMF Chief's Case Will Meet (WSJ)
Defense lawyers for former International Monetary Fund chief Dominique Strauss-Kahn are expected to argue to prosecutors in a meeting set for Wednesday that criminal sexual assault charges against him should be dismissed, people familiar with the situation said.

CFTC data reveal day traders’ role in volatile oil markets (FT)
The Commodity Futures Trading Commission has for the first time revealed that almost 95 per cent of US crude oil futures volume is generated by day trading or betting on arcane price relationships, suggesting long-term bets on whether prices will rise or fall have little effect on energy price volatility.

UK needs £20bn more austerity and retirement at 70, says PwC (Telegraph)
To bring public debt back down to just below 40pc of GDP by 2050, where it was in 2007 before the financial crisis, would require fiscal tightening of around 1.3pc of GDP by 2020, PwC said. That would mean both a further £20bn of austerity and an increase in the planned retirement age to 70. If taxes were to take the full brunt of the cost, the £20bn would be equivalent to another rise in VAT from 20pc to 24pc, or a two percentage point increase in both employer and employee National Insurance contribution rates.

Ex-Goldman banker to advise TPG (FT)
Jon Winkelried, former co-president of Goldman Sachs, has signed on as an adviser to a new credit fund being raised by buy-out firm TPG, according to marketing materials reviewed by the Financial Times.

Temasek Raises $3.62 Billion in Bank Stake Sales (WSJ)
Temasek Holdings Pte. Ltd. has raised a total of US$3.62 billion by selling parts of its stakes in Chinese lenders Bank of China Ltd. and China Construction Bank Ltd., a person familiar with the situation said Wednesday, as the Singapore state-investment company diversifies its portfolio away from a heavy weighting in financial companies.

Rise of the machines: U.S. Army testing real life 'Iron Man' exoskeleton that gives soldiers super strength (Daily Mail)
The appropriately named Human Universal Load Carrier, or HULC, is a wearable exoskeleton that allows soldiers to carry up to 200 pounds for over 12.4 miles on a single battery charge.

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