Opening Bell: 07.20.11

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Morgan Stanley May Best Goliath Goldman (Deal Journal)
With Goldman Sachs stumbling to a worse-than-expected earnings showing, kid brother Morgan Stanley is projected to post higher revenue than its rival for the first time since late 2008.

Ill-fated GOP debt plan passes in House vote (CBS)
The Republican-controlled House of Representatives passed legislation to cut federal spending by $6 trillion and require congressional approval of a constitutional balanced budget amendment in exchange for raising the federal debt ceiling and averting a threatened government default…President Obama has also vowed to veto it should it ever reach his desk.

Merkel to Meet Sarkozy for Talks on Debt Crisis (Bloomberg)
Euro-area government chiefs are meeting tomorrow in Brussels for the second time in a month as they aim to break a deadlock over a new Greek rescue that has spooked investors. While Merkel said yesterday the crisis can’t be resolved in “one spectacular step,” Greek Prime Minister George Papandreou said in an interview that the summit could be a “make-or-break moment” for the euro region.

Greek finmin plans talks with U.S., IMF's Lagarde (Reuters)
Greece's Finance Minister Evangelos Venizelos will head to Washington on Sunday for talks with International Monetary Fund chief Christine Lagarde and U.S. government officials, his ministry said on Wednesday.

EU banks face fines if they fall short on capital (Reuters)
Banks in the European Union could face fines of up to 10 percent of turnover if they fail to comply with tougher capital and liquidity rules, the bloc's financial services chief said on Wednesday.

Yes, Greece could devalue (while staying in the euro) (FT Alphaville)
On Wednesday, economist Stephane Deo explains how Greece could use a sort of proxy for currency devaluation — the erm, traditional answer to debt overloads — to help haul its way out of crisis. “The idea is thus to move the tax base towards consumption – i.e. to use VAT to finance the social accounts. Hence the name ‘social VAT’…This has the advantage of reducing the cost of labour, but also has the advantage of taxing imports, which is a way to shift part of the burden abroad.

Romney as Job Creator Clashes with Bain Record of Job Cuts (Bloomberg)
What Romney skips is his experience in eliminating jobs. It’s a facet of his career that presents a particular challenge for the Republican primary frontrunner: Tough business decisions don’t necessarily translate into good politics. As head of private equity firm Bain Capital LLC, Romney was the lead deal-maker, buying and selling companies to make money for investors…Entrepreneurs and corporate founders “create the bulk of the jobs, not the financiers,” said Marc Wolpow, a former Bain managing director who left in 1999 and is now co-chief executive officer of Audax Group, which manages more than $4.8 billion.

A Dodd-Frank Retreat Deserves a Veto (WSJ)
Tim Geithner: "Where are we today, a year since the Wall Street Reform and Consumer Protection Act was signed into law? By almost any measure, the U.S. financial system is in much stronger shape, not just relative to the depth of the crisis but also relative to conditions that prevailed before it hit.

CME Seeks To Widen Price Swings (WSJ)
The owner of the Chicago Board of Trade is trying to win over farmers, food companies and livestock producers on a plan to allow wider swings in U.S. corn prices. CME Group wants to expand how much the price of a corn-futures contract can rise or fall in a day. The proposal is pitting producers against the exchange and some speculative traders who don't have an interest in the underlying commodity.

BlackRock Second-Quarter Profit Rises 43% (Bloomberg)
Net income increased to $619 million, or $3.21 a share, from $432 million, or $2.21, a year earlier, the New York-based company said today in a statement. Excluding certain one-time items, BlackRock earned $3 a share, compared with the $2.89 average estimate of 13 analysts surveyed by Bloomberg.

HSBC Acts on Offshore Cash (WSJ)
The global banking giant is cutting ties with wealthy American clients who bank offshore, as U.S. prosecutors turn up the heat on the bank to produce information about account holders who may be evading taxes, people familiar with the matter say.

Bank Boon: Business Loans? (WSJ)
Even with the economy stuck in neutral, three of the nation's biggest lenders—Bank of America Corp., Wells Fargo & Co. and KeyCorp—are sounding more hopeful that businesses are accelerating their borrowing. The trio of banks reported second-quarter results Tuesday, each giving hope that businesses are taking loans used for everything from hiring to buying equipment, though the rate at which the customers are actually using lines of credit remains low.

Pimco Favors Shorter Debt as Saving Boosts Yen: Japan Credit (Bloomberg)
Pacific Investment Management Co., manager of the world’s biggest bond fund, favors Japan’s shorter-maturity securities as the nation’s trade surplus supports the yen and stems concern its debt burden will widen.

Trader Chiesi hears sentence today (NYP)
Chiesi, 45, is scheduled to appear before judge Richard Holwell in Manhattan federal court at 2 p.m. today, where she will be sentenced for sharing illegal stock tips with her hedge-fund buddies, including Raj Rajaratnam, the founder of Galleon Group. Prosecutors are expected to ask that Chiesi receive between 36 and 46 months in prison. But Chiesi's lawyer, Alan Kaufman, will ask that she at least be handed a lighter sentence than the one given her former boss at New Castle, Mark Kurland, who's currently serving 27 months.

Murdoch foam protester charged with public order offence (Independent)
The protester accused of throwing a paper plate of shaving foam at Rupert Murdoch as he gave evidence to MPs was charged today with a public order offence. Jonathan May-Bowles, 26, of Edinburgh Gardens, Windsor, was bailed to appear before City of Westminster Magistrates Court next Friday, July 29.

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