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Opening Bell: 09.07.11

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German Court Upholds Bailouts (WSJ)
Germany's Federal Constitutional Court on Wednesday ruled that the euro-zone's 2010 bailout for Greece and subsequent aid granted through the currency bloc's rescue fund is legal, eliminating a major hurdle to the sovereign-debt crisis response that's been closely watched by financial markets. The constitutional court in Karlsruhe also ruled that Germany's Parliament should have more say in major future euro-zone bailouts, but these would only need approval from the parliament's budget committee.

S&P Met With Bond Firms (WSJ)
S&P officials visited large bond firms including Allianz SE's Pacific Investment Management Co., Los Angeles-based TCW Group Inc., Legg Mason Inc.'s Western Asset Management and New York asset-management giant BlackRock Inc., according to people who either attended the meetings or were briefed on them afterward. Some of these investors say they came away with a stronger sense the nation's debt rating would be cut. At the meeting with Western Asset Management on July 20, S&P officials noted that "70 to 75% of the countries that are put on watchlist for downgrade, get downgraded," said Stephen Walsh, Western Asset's chief investment officer, who was briefed on the gathering. He said Western Asset officials "came out unambiguous that the odds were much higher than 50-50." The view at the firm, Mr. Walsh said: "Wow, that was a sobering meeting."

Obama Said to Seek $300B Jobs Package (Bloomberg)
The main components of Obama’s jobs plan, though not its scale, have been largely telegraphed by the administration. For weeks, people familiar with deliberations have said the White House is considering tax incentives, infrastructure and assistance to local governments. Obama has stressed construction and tax cuts in recent public speeches. Obama has pressed Congress throughout the year to renew the payroll tax holiday along with extended unemployment benefits, which also expire Dec. 31. Backing for a reduction in the employer contribution to the payroll tax has been under consideration since at least June.

Greek Debt Swap Take-Up at 75 Percent: Report (CNBC)
Private sector participation in a Greek debt swap has so far reached the 75-percent mark, far below a 90 percent target, newspaper Imerisia reported on Wednesday without naming its sources.

Bartz Fired as Yahoo CEO Amid Plans for Strategic Review (BW)
Under Bartz, 63, who took over as CEO in January 2009, Yahoo has frustrated investors and failed to keep Google Inc. and Facebook Inc. from siphoning off Internet users and advertising revenue. The management change and strategy overhaul show the board is listening to shareholders, said Ken Sena, analyst at New York-based Evercore Partners. ... “I am very sad to tell you that I’ve just been fired over the phone by Yahoo’s chairman of the board,” Bartz said in a memo sent to staff and obtained by Bloomberg News.

Treasuries, TIPS, and Gold (Wonkish) (Paul Krugman)
"(Yes, it’s 4:30 AM where I am. I found myself wide awake, thinking about gold prices. You got a problem with that?)"

Suspected bank robber who called himself 'Willie Sutton Jr.' on Facebook busted by FBI (NYDN)
Hippolite offers a glimpse of a motive on his Facebook page which, if true, would hardly earn him a spot in the pantheon of prolific bank robbers. "What If We All Got Fed Up With This Recession And Started Running Inside Every F------ Bank T0 Give Us The Money That Belongs To Us???" he wrote on July 29, according to an affidavit unsealed Tuesday in Brooklyn Federal Court.

In Euro Zone, Banking Fear Feeds on Itself (NYT)
Though they have not succeeded in calming the markets, European leaders have taken a series of steps to avert a Lehman-like failure. New credit lines have been opened by the European Central Bank for institutions that need funds, while the proposed Greek bailout would provide loans to countries that need to recapitalize their banks. In addition, the central bank has been buying up bonds from Italy and Spain, among other countries, to keep interest rates from spiking. Many of these have been bought from European banks, effectively allowing them to shed troubled assets for cash.

Probe Into Goldman Widens (WSJ)
Prosecutors in New York are pressing ahead with their inquiry into the way Goldman Sachs Group Inc. marketed certain mortgage-linked instruments before the financial crisis, issuing subpoenas to Morgan Stanley and other investors in the deals, people familiar with the matter said. Some of the subpoenas were received in recent weeks, the people said. The Manhattan district attorney's office began its probe into Goldman following the release in April of a U.S. Senate subcommittee report into the causes of the crisis. Goldman was featured prominently in that report. ... The prosecutor's requests to investors, including some hedge funds, concerned how Goldman sold the deals, a person familiar with the matter said.

Republicans vow to block consumer nominee (FT)
Richard Cordray, President Barack Obama’s pick to run the new US consumer finance agency, will not be confirmed for the post until the White House changes the structure of the unit and scales back its authority, Senate Republicans vowed Tuesday. ... Committee Republicans, led by Richard Shelby of Alabama, reiterated their opposition to the fledgling agency, arguing that it lacked “effective” checks on its authority and its chief would be too powerful in setting credit terms and unaccountable to industry or Congress.

We must listen to what bond markets are telling us (FT)
It is becoming ever clearer that the developed world is making Japan’s mistake of premature retrenchment during a balance-sheet depression, but on a more dangerous – far more global – scale. Conventional wisdom is that fiscal retrenchment will lead to resurgent investment and growth. An alternative wisdom is that suffering is good. The former is foolish. The latter is immoral.

Miss Colombia Reprimanded for Going Commando During Miss Universe Appearances (Fox)
“Colombia had to be spoken to and told she needed to wear underpants as what she was doing was totally inappropriate,” a close source told us. “People have been pretty upset by it; there have been photos and media appearances where she has completely had her crotch out.”