Frontrunning: June 15

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  • Greece is Relevant: Central Banks Warn Greek-Led Euro Stress Threatens World (Bloomberg)
  • Greece is very Relevant: World Economies Prepare for Panic After Greek Polls (Reuters)
  • ECB's Draghi flags euro risks, spurs rate cut talk (Reuters)
  • And as usual, beggars can be choosers... Hollande Urges Common Euro Debt, Greater ECB Role (Reuters)
  • Wait and flee - Electoral uncertainty sends the economy into suspended animation (Economist)
  • The EU Smiled While Spain’s Banks Cooked the Books (Bloomberg)
  • Osborne’s £100bn Plan for UK Economy (FT)
  • Two Cheers for Britain’s Bank Reform Plans: Martin Wolf (FT)
  • BOJ Holds Policy Ahead of Greek Vote with Eye on Global Markets (Bloomberg)
  • China Hits Back at U.S. Criticisms at WTO (Reuters)
  • Taskforce Calls for Changes in Basel III (FT)
  • Brazil Real Gains as Mantega Begins to Unwind Capital Controls (Bloomberg)
  • Opec Keeps Oil Production Ceiling (FT)

Overnight Media Digest:

FT

OSBORNE'S 100 BILLION POUND PLAN TO AID UK ECONOMY

British finance minister George Osborne on Thursday night announced plans for a 100 billion pounds ($155.43 billion) support programme for the British economy, as he battened down the hatches for a worsening "eurozone debt storm".

FRANCE AND ITALY UNITE ON EURO CRISIS PLAN

France's and Italy's leaders last night stressed their commitment to save the euro through growth policies, debt mutualisation and development of a eurozone bailout fund ahead of a critical series of international summits.

US GROUPS FACE $3 TRILLION DEBT REFINANCE CRISIS

U.S. financial institutions and junk-rated borrowers may struggle to refinance nearly $3 trillion in debt set to mature by the end of 2016 as global volatility threatens demand for risk assets, Standard & Poor's warned on Thursday.

BASEL III WILL 'DAMAGE DEVELOPING COUNTRIES'

Tough global bank reforms will be disproportionately difficult to implement in developing economies and will damage their growth, a global taskforce of bankers and businessmen from emerging markets is set to warn.

STANFORD SENTENCED TO 110 YEARS IN PRISON

Texan banker Allen Stanford was sentenced to 110 years in prison for defrauding customers of $7 billion to fund a lavish lifestyle including the purchase of Caribbean property and an international cricket tournament.

AIB TO CUT BACK ON EXECUTIVE AND STAFF PAY

Allied Irish Banks has announced plans to slash executive and management pay, freeze staff salaries and switch employees from its existing defined benefit pension scheme to cut costs.

JEFFERIES LINED UP FOR MANCHESTER UTD LISTING

Jefferies, the New-York based investment bank, will take the place of Morgan Stanley on the initial public offering of Manchester United if the football club's owners shift the offering from Asia to the US.

NOMURA FACES PRESSURE OVER TRADING LEAKS

Nomura is coming under increasing political pressure to strengthen its internal controls and take responsibility for the leaking of non-public information by staff in three insider trading cases.

 

WSJ

* Foreigners are stepping up investment in the U.S. after retreating during the depths of the financial crisis, with the latest flurry spurred partly by Europeans seeking safe havens amid the Continent's debt crisis.

* Business-software company Yammer Inc agreed to sell itself to Microsoft Corp for $1.2 billion, according a person familiar with the matter, in a sign Microsoft may be trying to plug holes in its ubiquitous Office software.

* Nokia warned that its cellphone business is deteriorating and that it will cut 10,000 workers, a setback that threatens partner Microsoft's mobile aspirations.

* Allen Stanford, the international financier from Texas convicted of masterminding a $7 billion Ponzi scheme, was sentenced to 110 years in federal prison.

* Despite the acknowledged glitches associated with the Facebook IPO, firms considering legal action against Nasdaq face an uphill battle.

* The New York Fed said it has fully recouped more than $70 billion in loans it made to support the 2008 bailouts of Bear Stearns and AIG.

* Federal regulators stepped up an investigation into gas-tank fires involving Chrysler Group LLC Jeeps, saying they will now conduct a detailed analysis that could affect as many as 5.1 million vehicles on the road.

* The trustee unwinding the brokerage of MF Global Holdings Ltd struck a deal with CME Group Inc that will see the futures-exchange operator turn over about $130 million in property that will go to former customers of the collapsed firm.

* Mexican billionaire Carlos Slim has acquired an 8.4% stake in YPF SA, Argentina's biggest oil-and-gas company, the latest in a series of moves by the world's richest man to expand his global reach.

* Two big makers of online games said they are pulling titles from Google Inc's fledgling Google+ social network, the latest stumble in the Internet giant's attempt to create a viable competitor to Facebook Inc.

 

NYT

- Greek elections on Sunday could soon bring real-world urgency to a debate that had been largely academic: Whether the euro zone can withstand the departure of one of its members.

- EFG Hermes, struggling in a volatile market, is scrambling to sell a large piece of its business to a smaller rival in Qatar.

- At a time when federal and state public works programs are stalled, the biggest airports in the U.S. are in the midst of major renovations or expansions that, taken together, amount to some of the largest infrastructure projects in the country.

- The Organization of the Petroleum Exporting Countries left unchanged a ceiling for oil production at a meeting in Vienna on Thursday, despite signs of a slowdown in the global economy and slumping oil prices.

- The Food and Drug Administration is investigating whether the nation's largest operator of dialysis centers, Fresenius Medical Care, violated federal regulations by failing to inform customers of a potentially lethal risk connected to one of its products, an FDA official said.

- Research in Motion gave its former co-chief executives about $12 million in exit payments after they stepped down this year, the BlackBerry maker disclosed in a securities filing on Thursday.

- Nokia said Thursday it would slash 10,000 jobs, or 19 percent of its work force, by the end of 2013 as part of an emergency overhaul that includes closing research centers and a factory in Germany, Canada and Finland, and the departures of three senior executives.

- Testifying at Britain's long-running inquiry into media standards, Prime Minister David Cameron rejected suggestions on Thursday that he traded favored treatment for electoral support by Rupert Murdoch's newspapers.

- Framing his re-election bid as a stark choice between government action to lift the middle class and a return to Republican economic policies that he said had caused a deep recession, President Barack Obama on Thursday called the presidential decision facing Americans a clear-cut one that will determine the long-term trajectory of the economy.

- Switzerland and Britain, the two largest European economies that do not use the euro, announced measures on Thursday to help shelter their countries from a crisis that has engulfed Greece and Spain and appears poised to sweep over Italy.

 

Canada

THE GLOBE AND MAIL

- The Supreme Court of Canada is interrupting its summer break to decide whether a by-election is required in a federal Toronto riding where nearly 80 voters were found to have been improperly registered to cast ballots.

Report in the business section:

- Canadian factories suddenly are among the busiest in the world.

In the United States, President Barack Obama preaches weekly about a manufacturing renaissance, and Germany's ability to compete with lower-cost rivals in Asia continues to astonish. Yet neither of those countries is hiring more factory workers now than Canada, a country burdened by relatively high labour costs, a strong currency and weak productivity.

NATIONAL POST

- Members of Parliament completed a marathon voting session Thursday night on the Conservative government's budget bill, voting on hundreds of amendments in an exercise that lasted nearly 24 hours.

FINANCIAL POST

- Royal Bank of Canada is notifying insurance brokers that it plans to stop selling a swath of popular life insurance products, according to a memo obtained by the Financial Post.

 

European Economic Update

  • UK Total Trade Balance (GBP/Mln)  £4421 – higher than expected. Consensus £2700.  Previous £2739.  Revised £2957.
  • Sweden PES Unemployment Rate  4.0% – lower than expected.  Consensus 4.1%.  Previous 4.3%.
  • Spain Labour Costs  1.1% y/y.  Previous 1.6% y/y.
  • Italy Trade Balance EU  702M.  Previous 1554M.  Revised 1557M.
  • Turkey Unemployment Rate  9.9%.  Previous 10.4%.