Whither Europe: “The Spanish government has very limited financial market access,” Moody’s said in a statement yesterday to announce the ratings company had cut Spain’s grade three levels to Baaa3, one level above junk. Spain’s borrowing cost on 10-year bonds hovered near 7 percent, up from 5.1 percent at the beginning of the year. Moody’s also cut Cyprus’s grade on fears of contagion following the results of the Greece’s June 17 elections.
The downgrade didn’t prevent Spain’s Amancio Ortega, founder of retail giant Inditex, from becoming Europe’s richest person, according to the Bloomberg Billionaire Index.
“We have no sense that European partners will follow this tactic of blackmail heard from some quarters and stop funding,” Alex Tsipras, leader of Greece’s anti-bailout Syriza party told Bloomberg Television. Rather, Mr. Tsipras thinks that Greece can break the terms of the European rescue agreement signed by a previous Greek government without being forced to exit the eurozone.
“If the Greeks do not meet the commitments they have made, do not meet their financial commitments, do not repay loans, Slovakia will demand that Greece leaves the euro zone,” Slovakia Prime Minister Robert Fico said at a news conference today.
Credit Agricole’s Grexit contingency plans include walking away from Greek assets, The Wall Street Journal reports.
Germany beat the Netherlands 2-1 on goals by Mario Gomez.
Softballs: Jamie Dimon got in and out of Senate Banking Committee hearings without being pressed too hard on JPMorgan’s recent trading losses, and Heidi Moore says it comes down to one chief reason: No amount of regulation can prevent banks from making stupid decisions.
Mr. Dimon’s recent troubles may have created space for another Wall Street boss to claim the title of America’s Least Hated Banker.
Emerging market: Large institutional investors and the Wall Street firms that bank them are talking about creating an electronic marketplace for corporate bonds, The Journal reports. BlackRock and Goldman Sachs are among firms that have begun building their own platforms.
Lawyer’s suit: Former Dewey & Labouef partner Henry Bunsow is suing the law firm, which filed for bankruptcy on May 28, charging that the firm encouraged partners to make capital investments in the firm in what amounted to a pyramid scheme. “Defendants used partner capital investments as a form of revenue to enrich themselves and to hide the dire condition of the firm from the public,” read Mr. Bunsow’s complaint.
Tear-jerker:Wily defense counsel Gary P. Naftalis drew tears from client Rajat Gupta, the former McKinsey & Co. founder accused of passing corporate secrets to Galleon Group’s Raj Rajaratnam, during closing remarks of the insider-trading trial at the U.S. Southern District courthouse in downtown Manhattan. “Whatever you do here will mark whatever future he [Gupta] has left,” Mr. Naftalis said. “To believe the argument of the defense team, you’d have to believe Mr. Gupta is one of the unluckiest men in the world,” prosecutor Reed Brodsky told the jury.