Niall Ferguson compared the game of chicken playing out between Athens and Greece to the Cuban Missile Crisis.

If the story of Spanish banks sounds familiar, perhaps you remember Ireland?

Moody's downgraded five Dutch banks.

Blame game: Facebook is preparing to file a motion in U.S. District Court that would consolidate all lawsuits arising from the company's disappointing initial public offering, The New York Times reports. The motion, which could be filed as soon as today, is expected to lay some blame on Nasdaq for the lost shareholder value in the days after the IPO.

Quants gain: May was a good month for black-box hedge funds, Reuters reports. The BarclayHedge index of commodity trading advisers, or CTAs, as the funds are sometimes called, gained 2.6 percent last month. The BarclayHedge hedge fund index fell 2.8 percent.

Bank bears: Investors increased their bets that bank stocks would fall by 9 percent in the second half of may against the previous two weeks, the largest increase over a two-week period since 2009. Short interest in Bank of America and Citigroup jumped 75 percent and 61 percent respectively, according to The Wall Street Journal.

Repaid: The Federal Reserve Bank of New York said it has been paid in full—$53.12 billion for loans plus interest—the funds used to support government bailouts of AIG and Bear Stearns.

Dalio's world: Want to know your favorite trader's batting average on tech stocks? Baseball cards are in at Bridgewater Associates.

Bank sues Schilling: Citizens Bank is suing to recover $2.4 million in loans made to former Red Sox star Curt Schilling, whose video game company 38 Studios filed Chapter 7 this week.

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.

An ill-timed acquisition has made Credit Agricole the foreign bank with the most to lose in the Greek crisis.

Despite Spanish Prime Minister Mariano Rajoy's assertion that the matter of his nation's enfeebled banks was "resolved," yields on Spain's government bonds rose, and Fitch Ratings downgraded 18 Spanish lenders.

Italian Prime Minister Mario Monti is on deck.

Breakdown: Jamie Dimon testifies this morning at a Senate Banking Committee hearing on JPMorgan's recent trading losses. As we noted last night, Mr. Dimon's prepared remarks are dry stuff. Committee chair Sen. Tim Johnson, a South Dakota democrat, will ask “How can a bank take on ‘far too much risk’ if the point of the trades was to reduce risk in the first place?” according to Bloomberg, and Sen. Richard Shelby, the top-ranking Republican on the committee, will focus on specific nature of the trades. Other potential questions: How were executives in the chief investment office paid? And how involved was Mr. Dimon in the decision to change the way the CIO calculated its VaR, or the amount of money the office could lose on a given day?

Smith Barney no more: Morgan Stanley intends to drop the Smith Barney name from its retail brokerage, chief executive office James Gorman said yesterday. Morgan Stanley acquired a stake in Smith Barney, the firm that made "money the old fashioned way,"  in 2009, and plans to complete the outright purchase of Citigroup's remaining shares in the years to come. AsThe New York Timespoints out, Smith Barney joins Shearson, E.F. Hutton and Salomon Brothers among former Sandy Weill acquisitions to wind up on the scrap heap.

Moody's man: The Wall Street Journal has a go at profiling Gregory Winans Bauer, Moody's global head of banking, the man behind the potential ratings downgrades stalking the world's leading lenders. What did they find? "An avid yachtsman" leading 170 banking analysts neither as well known or highly paid as the bankers whose dreams they are currently haunting.

Gupta grilled: Rajat Gupta's daughter Geetanjali testified in Judge Jed Rakoff's courtroom yesterday. Would Ms. Gupta do anything for her father, a prosecutor asked on cross-examination? “I would do anything for my father, but I would not lie, though, on the stand,” she said.

Paper money: Syria released new Russian-printed banknotes into circulation, four Damascus-based bankers told Reuters.

Wipeout: The financial crisis knocked 39 percent off median household wealth, the Federal Reserve said yesterday, as the collapse of the housing market pushed net worth to 1992 levels.

Settled: The Treasury Department reached a $619 million settlement with ING Bank after the government charged that the Dutch lender breached U.S. sanctions against countries such as Iran, Libya and Cuba.

Squeeze play:

Self-defense: Rajat Gupta's "swept-back hair, square jaw and soothing voice" could make the former McKinsey & Co. CEO his own best witness as he stands trial for insider trading in lower Manhattan's Southern District courthouse. Calling a defendant to the stand is often risky business.

Detoxed: Citigroup dismantled a board committee that oversaw the bank's toxic assets, according to Bloomberg. Citi Holdings, the bad bank created by CEO Vikram Pandit to house risky loans, still holds about $200 billion in assets, including Greek and Spanish bonds. That's no small amount, even if it's down from $600 billion when Citi Holdings was created in 2008.

$850 an hour: Madoff trustee Irving H. Picard has generated more $554 million in fess against $330 million returned to the con man's victims, and Andrew Ross Sorkin wonders if there's a better way.

Weak glue: Dewey & LeBoeuf filed Chapter 11, and the like big law firm failures before it, the recipe was growth-by-merger and poaching of star attorneys from other firms: When times got tough, the firm's lawyers had no common culture to rally around.

Europe leveraged: At least a quarter of European leveraged buyout firms with debt due before 2015 may default, according to Moody's.

The tempered reaction to Moody's downgrade of Nordic banks indicated the ratings company's influence is waning.

Escape from Tokyo: Japanese investors are buying foreign property to serve as safe haven in the event of financial disaster.

[Timothy A. Clary/AFP/GettyImages]

JPMorgan fallout:

Crisis experts liked Mr. Dimon's forthright response to the billions in trading losses JPMorgan disclosed last week. Lucas van Praag chimed in: "From a communication perspective, the approach is smart, although I'm sure their legal team would probably rather pursue a bunker mentality."

Simon Johnson parses Tim Geithner's NewsHour interview and hears the Treasury secretary asking Mr. Dimon to resign from the board of the New York Fed.

JPMorgan's losses are "the way America works," Mitt Romney in an interview Wednesday with Ed Morrissey. “The $2 billion JPMorgan lost, someone else gained.”

How high? Your guess on Facebook's closing price is as good as ours. Reuters finds a 15 to 20 percent pop credible, which puts the price in the mid-$40s; the average estimate of analysts polled by Morningstar was $50. On twitter yesterday, it wasn't hard to find pundits pushing estimates well into the $70s (those higher marks seemed less serious, more sneering).

Meanwhile, Facebook will pay it's underwriters $176 million in fees, or 1.1 percent of the $16 billion offering, a hefty discount to the median 3.6 percent that the 10 previous biggest U.S. IPOs paid investment bankers.

Not breaking up? Greek voters are returning to pro-bailout parties, a new poll finds. The prospect that the leftist Syriza coalition, whose leader Alex Tsipras has threatened to "tear up" the existing rescue plan, increasing fears that Greece may leave the eurozone.

Still, a commercial printer is drawing up plans to produce drachma banknotes, in the contingency of a Grexit.

Spanish steps: Moody's downgraded 16 Spanish banks, and the two biggest by three grades each. A little perspective: Morgan Stanley said that a three grade cut by two ratings companies would force the firm to post an additional $9.6 billion in collateral.

Spain tapped Goldman Sachs to value nationalized lender Bankia SA.

A-list: Goldman executives Lloyd Blankfein, Gary Cohn and David Viniar, American Express CEO Kenneth Chenault and former Proctor & Gamble CEO A.G. Lafley are among the financial industry titans to receive invites to the insider trading trial of Rajat K. Gupta.

Oracle offered: Warren Buffett kicked the tires on ResCap, Ally Financial's mortgage unit, before the embattled home lender filed for bankruptcy, according to Bloomberg. Buffett sought to avoid a ResCap filing because his firm, Berkshire Hathaway, held unsecured debt in the lender.

[Photo by Mario Tama/Getty Images]

Scissor season: Moody's is expected to begin cutting ratings on banks any day now, and Bloomberg notes the consequences: Higher funding costs, curbed lending and another thorn in the side of economic growth. According to a Moody's note last month, Italian lenders are first on the chopping block, to be followed by banks in other European countries. U.S. banks will also come in for potential downgrades, but are unlikely to see ratings changes until June.

Banks in trouble: Spain is likely to require lenders to post an additional $45 billion in collateral against loans to the construction sector, Reuters reports, raising the likelihood of another injection of public cash. The Spanish government is expected to announce new demands after a cabinet meeting on Friday.

Meanwhile, Spanish banks are pushing their debt and equity on retail customers as larger investors pull back. The Journal worries that a vicious circle may be emerging: Fearing that losses would spook individual investors, banks have put off recognizing losses, exacerbating the tenuous position of Spanish banks, and the eventual reckoning for mom and pop.

Margin-roasted: Robert Stiller was relieved of his position as Green Mountain Coffee Roasters chairman after he sold 5 million shares in the company, worth $125.5 million, in a margin call. Green Mountain's stock lost nearly half its value last week after the company reported disappointing earnings and amid calls by short sellers such as Greenlight Capital's David Einhorn, and Deutsche Bank forced Mr. Stiller to sell shares to satisfy loans secured against his Green Mountain holdings.

BofA meets: The great unwashed are expected to descend on Charlotte, North Carolina today to protest Bank of America's annual meeting, though it may be a toss-up as to whether the protestors bear the lender the most ill will. Other candidates: Recently jettisoned employees, refi applicants, holders of the company's basement-dwelling stock. In case you were worried, city officials passed an ordinance in January prohibiting items "ranging from backpacks to crowbars" at large events. Hecklers interrupted a Bank of America presentation at the Citi Financial Services conference in New York in March, chanting "bust up Bank of America before it busts up America," and at least 24 protestors were arrested at Wells Fargo's annual meeting in San Francisco last month.

Americans not wanted: Wealth managers around the world are closing the door on American clients as the start date for rules to prevent tax evasion approaches. Beginning next year, foreign financial institutions must report information about income and interest accrued to the accounts of U.S. clients, raising compliance costs and limiting the options of Americans living abroad, according to Bloomberg. The IRS is holding a May 15 hearing, which could soften the implementation of the rules.

Tech banker: Michael Grimes, the banker who managed LinkedIn, Zynga and Groupon IPOs, spent years laying the ground work for Morgan Stanley's lead role in the Facebook offering, and made his career winning over Silicon Valley with a more flexible approach to investment banking.

Red tape: And it still takes a long time to refinance a mortgage.

[Stan Honda/AFP]

• The consumer price index for November comes out today. It probably rose, signaling inflation. But did it raise enough to finally placate the Federal Reserve? [Bloomberg]
• Look out, Spain! Moody's says it could very well cut your credit rating. Meanwhile, Standard & Poor's has its eye on you, Belgium. [Reuters]
• Goldman Sachs has brought on board former New York Fed bigwig Theo Lubke as its chief regulatory reform officer. [FT]
• November retail sales were the best they'd been since the company entered an economic tailspin in 2007. [WSJ]
• Republicans working on a 9/11 Commission-style report about the causes of the financial crisis will probably say U.S. housing policy is to blame. No one will even know they think that, though, because the version available in bookstores will contain the Democrats' telling of the tale. [NYT]

mtaylor [at] observer.com | @mbrookstaylor

Whitney told the FT that her firm, Meredith Whitney Advisory Group, already does a lot of the work the major agencies do. "We're providing ratings services now. ... But for the fact that they're on a subscription basis. ... We're not being paid by the issuers." The next step, said Whitney, is to become a "formal competitor to S&P and Moody's. Our system is far more transparent, the credibility is far greater."

And what about the conflicts of interest that prompted mountains of criticism if S&P and Moody's, who are paid by bond issuers for ratings? "I firmly believe in an issuer pay model. The subscribers are never going to pay and never going to pay enough. ... If you run a good business and you have the compliance in place and everything in place, there shouldn't be any problems."

Whitney earned a reputation as a hard-nosed analyst by issuing a bearish call on Citigroup in Oct. 2007, when optimism about the financial sector was still running fairly high. "Conflicts of interest only slow you down, and I don't want to be slowed down," she told the FT. "There's too much to do."

mtaylor [at] observer.com | @mbrookstaylor

Turns out Dodd-Frank limits the SEC's ability to pursue Moody's. The regulator nevertheless gave the ratings agency a hefty slap on the wrist for not adjusting credit ratings even after it had found them to be inaccurate.

The company had determined that a computer error had caused one of Moody's credit ratings to come out between 1.5 and 3.5 increments higher than it should have. "Nevertheless, shortly thereafter during a meeting in Europe, an MIS [Ed.: Moody's] rating committee voted against taking responsive rating action, in part because of concerns that doing so would negatively impact MIS's business reputation."

Certainly objectionable, but apparently not subject to SEC intervention.

(h/t Street Sweep)