Today's Headlines

Bloomberg:

• Tsipras Asks European Union for a New Bailout Program. (video) Alexis Tsipras just tried to jam the pin back into the grenade. Less than nine hours before Greece’s bailout package was due to expire -- and a day after he was forced to shut down his financial industry for lack of cash -- the Greek premier sought a new deal to maintain an aid lifeline and an umbrella to assure the critical flow of European Central Bank loans.

• Greeks Want a New Bailout Agreement. (video)

• Greece’s Mounting Default Risk Seen in Inverted Bond Yield Curve. Default risk is at its highest since 2012. To judge how bleak Greece's financial prospects are without a bailout program, take a look at its government-bond market. It's showing the highest risk of the nation defaulting on its private debt since 2012, when investors lost 100 billion euros ($112 billion) in the biggest-ever debt restructuring. Investors typically accept higher yields on bonds maturing further into the future, judging the risk of owning them to be greater. In Greece right now, that relationship is inverted. Two-year notes yield 23 percentage points more than the 10-year bonds. That's up from 10 percentage points at the end of last week, before Prime Minister Alexis Tsipras called a referendum on austerity measures demanded by international peers in exchange for more bailout funding. ``What the curve is telling us is that there is a very large risk of a restructuring, of a default in the near term,'' said Gianluca Ziglio, executive director of fixed-income research at Sunrise Brokers LLP in London.

• Puerto Rico Bonds Fall to Record Low as Debt Crisis Worsens. Puerto Rico bonds tumbled to record lows as Governor Alejandro Garcia Padilla moved to restructure some of the junk-rated island’s $72 billion of debt to ease its fiscal crisis. The commonwealth’s newest general obligations dropped 5.6 percent Tuesday to the lowest since they were first sold in March 2014. That followed a 6.5 percent decline for Puerto Rico securities Monday, the biggest one-day loss since at least 1998, according to J.R. Rieger, vice president of fixed-income indexes at Standard & Poor’s in New York.  

• Here's What Latin America's Sharp Slowdown Means for the U.S. The region's economy will grow only 0.1 percent this year, economists forecast. As the world nervously watches the Greek debt talks break down, there's another corner of the planet that's struggling. Growth in most of Latin America and the Caribbean is coming to a screeching halt, dragged down by Argentina, Brazil and Venezuela. Economists expect the region (excluding Mexico) to expand an almost nonexistent 0.1 percent this year, a forecast that would mean faring worse than the U.S. for a second straight year. It's a reversal of fortunes, as the chart below shows. 

• European Stocks Extend Worst Quarterly Drop Since 2012 on Greece. European stocks fell for a second day as investors weighed Greece’s ability to meet a payment amid an expiry of its bailout package. The Stoxx Europe 600 Index dropped 1.3 percent to 381.31 at the close of trading, taking its second-quarter loss to 4 percent.

• OPEC Crude Production Surges as Iraq Pumps at Record Pace. Iraqi crude production climbed to a record this month, helping send OPEC output to the highest level since August 2012. Output by the Organization of Petroleum Exporting Countries climbed 744,000 barrels to 32.134 million a day this month, according to a Bloomberg survey of oil companies, producers and analysts. Last month’s total was revised 189,000 barrels lower to 31.39 million a day, because of changes to the Saudi, Iraqi, Algerian and Nigerian estimates. OPEC has been boosting supply as it seeks to force higher-cost producers to cut output. The 12-member group agreed on June 5 to retain its collective output target of 30 million barrels a day, a level that it’s exceeded for 13 months, according to data compiled by Bloomberg.

• Fed Beats Greece as Treasuries Drop for First Quarter Since 2013. Haven demand sparked by the crisis in Greece isn’t proving enough to prevent Treasuries from heading for their first quarterly loss since 2013 with the Federal Reserve poised to raise interest rates this year. Treasuries are set to fall for a third month as a rebound in the world’s biggest economy buoys prospects for the Fed to increase borrowing costs as soon as September. U.S. sovereign securities erased losses Tuesday as German bonds gained after Greece’s government asked for a two-year bailout program from lenders hours before its aid agreement expires.

• Retailers Slam Obama’s Overtime Expansion as Costing Billions. Retailers and manufacturers blasted President Barack Obama’s plan to make more Americans eligible for overtime pay, saying the move would stunt workers’ careers and cost companies billions. The National Retail Federation says Obama’s proposed rule change to greatly increase how many salaried employees can claim overtime would force companies to use more part-time and entry-level workers. Businesses also may offer fewer promotions and convert salaried employees to hourly to avoid raising their pay, the NRF said.

Fox News:  

• Obama says US could 'walk away' from Iran nuclear talks, as deadline extended. (video) President Obama threatened to "walk away" from a nuclear deal with Iran if it fails to keep tabs on the country's compliance, as the negotiations were extended past their original Tuesday deadline amid sharp disagreements. The president addressed the shaky talks during a joint press conference in Washington, alongside visiting Brazilian President Dilma Rousseff. He spoke shortly after the State Department confirmed that the Iran talks were being extended another week. "My hope is they can achieve an agreement," Obama said.

CNBC: 

• Is your bond fund invested in Puerto Rico? (video)

ZeroHedge: 

• Gross Says Hold Cash, Prepare For "Nightmare Panic Selling".

• EFSF Confirms Greek Bailout Expires Today.

• Don't Blame Austerity: Five "Dastardly" Ways Italy Burned Through Taxpayer Money. (graph)

• Chart Of The Day: Is China Sending A Warning? (graph)

• Consumer Confidence Soars In June On Spike In Hope. (graph)

• Chicago PMI Prints Worst June Since 2008 As Employment Tumbles.

• The Global Template For Collapse: The Enchanting Charms Of Cheap, Easy Credit.

• Case-Shiller US Home Price Index Drops Most In A Year. (graph)

• When The PBOC Went All-In: China Stocks See Biggest Intraday Swing In 23 Years. (graph)

• Why There Is No Growth: The Entire S&P 500 Free Cash Flow Is Going Back To Shareholders.

Telegraph: 

• Greece crisis live: Latest news as Greeks submit audacious new two-year bail-out application but promise to default tonight. Athens applies to European rescue fund for €29bn loan package in return for debt relief as midnight bail-out expiry looms. 

• What the front pages say: how is Europe covering Greece? How are the major European papers covering the Greek crisis? After all, this affects their countries too... 

Aargauer Zeitung:

• Grexit May Be Gain for Euro Zone, Merkel Adviser Says. Greek exit from euro zone "would hardly be a reason to worry because the risk of contagion for the other countries is low," Lars Feld, an economic adviser to German Chancellor Merkel said. The Greek govt is solely responsible for failure of negotiations, he said.

El Mundo:

• Greek Labor Minister Tells Mundo If Greece Falls Eurozone Falls. Panos Skurletis said that if door opens for Greece to exit Europe the door will open for other countries to exit. Skurletis said European leaders fear the advance of left wing parties in Europe and want to crush Syriza to provide an example. Skurletis says he doubts Greece will be kicked out of euro even if Greek people vote 'no' in July 5 referendum.