By Patrick Clark 6/14/12 7:44am

Morning Read

Moody’s Cuts Spain to Near-Junk Status as Europe Awaits Greek Elections: Wall Street Roundup

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. Read More

By Patrick Clark 5/07/12 7:59am

Morning Read

Francois Hollande

Austerity in Doubt, Some MF Global Clients Wait for Dollar One, Buffett Says ‘Peanuts’: Roundup

Austerity plans will be reexamined after elections in France and Greece, though one country is more likely to adopt radical change. Not all MF Global clients were created equal when it comes to recovering funds from the failed derivatives broker. Buffett says his investment in Goldman Sachs was just peanuts. Read about it in today’s Wall Street roundup.

Change of tide? François Hollande defeated Nicolas Sarkozy, as expected, in a runoff election, installing as French president a socialist party leader who has promised to revisit austerity plans negotiated between Mr. Sarkozy and German Chancellor Angela Merkel. In Greece, voters shifted support away from political mainstays to extreme parties, placing the future of austerity in that country in question. The “bitter reality” of the European economic situation may preclude Mr. Hollande from straying too far from his predecessor’s path.

In Greece, on the other hand, the election results increase chances that the country will exit the euro to 50-75 percent, according to two Citigroup economists, though they say that a broad break-up of the monetary union is unlikely.

Zero Hedge has your guide to Europe for Dummies.

Preferred customers: Some MF Global clients have recovered holdings from the failed broker, while others have yet to see a dollar, the Wall Street Journal reports. The difference: where the clients invested their money. Funds invested in the U.S. have been at repaid 72 percent, but regulatory quirks leave those with money invested overseas waiting to recover funds.

Seeking allies: Reuters digs into the state of affairs at Ally Financial, “one of the least scrutinized bailouts of the financial crisis,” and hears that mortgage-lending unit ResCap may be placed in bankruptcy within the next week. Ally, meanwhile, has been the victim of competing interests internally and lax government oversight. With indications that General Motors and Chrysler are less likely to auto loans to Ally, the Treasury’s 74 percent stake in the company could lose value. Read More

By Patrick Clark 5/03/12 8:34am

Morning Read

Aubrey McClendon

Round Up: Chesapeake Hedge Fund Exposed, Dewey Deal Falls Through

The more you poke into gas giant Chesapeake CEO, the more foul odor emerges. There’s a sad inevitability to the news that a lifeline to foundering law firm Dewey & LeBouef was withdrawn. It’s a good day for Carlyle’s founders, even if they didn’t get their price and an Obama donor offers a revealing anecdote about how the rich see themselves. Read about it in our morning Wall Street roundup.

Bad gas: From 2004 to 2008, Chesapeake Energy CEO Aubrey McClendon ran a private hedge fund that traded the same commodities that Chesapeake produced, according to Reuters. The $200 million fund listed Chesapeake’s Oklahoma City HQ as its mailing address, and employed an accountant who was also on staff at the natural gas powerhouse. Marketing the fund, we expect, was a breeze.

McClendon addressed media for the first time since he was stripped of his chairmanship, but wouldn’t discuss reported conflicts of interest: “Your mother told you not to believe everything you read or hear for good reason,” he said. Read More