Today's Headlines

Bloomberg:

• Monti's Backers Slide in Polls Signals Risk for Fiscal Rigor. The four main political parties backing Prime Minister Mario Monti’s unelected government fell below 50 percent for the first time in an opinion poll, with support surging for an anti-austerity bloc. The 5 Star Movement, whose leader, comic-turned-politician Beppe Grillo, says the nation may need to restructure debt and exit the euro, became Italy’s second-biggest party, a poll by the SWG Institute showed. Monti’s popularity fell to an all-time low of 33 percent, less than half the level when he was appointed in November, SWG said. Italy, the bearer of the euro’s second-largest public debt, must have “budget discipline as a travel mate” in the future, Monti said in Parliament on June 13. Monti passed a 20 billion- euro ($32 billion) austerity plan in January that aimed to bring the budget deficit within the European Union limit this year. The measures contributed to pushing the economy into its fourth recession since 2001, with unemployment now topping 10 percent. The Democratic Party, Silvio Berlusconi’s People of Liberty, the Union of Centrists, and the Future and Liberty Party, the main parties backing Monti, hold more than two thirds of the seats in Parliament and have faced a decline in support since the start of his government in November. SWG said the four are currently polling at 48.5 percent.
• Obama Heads to G-20 With Few Tools To Stem Euro Debt Crisis. Europe’s sovereign debt crisis, which Obama has called the “cloud” hanging over the U.S. economy, will be the central topic for the Group of 20 nations summit next week in Los Cabos, Mexico. Yet U.S. officials said they don’t expect the meeting to result in significant progress toward a resolution. The G-20 meets June 18-19, one day after Greek elections that may determine that country’s future in the euro region and as global markets look to Europe’s leaders for clearer signs of how they move forward.
  
• ECB Deposit Rate of 0% Said To Be No Bar To Lower Benchmark. European Central Bank policy makers have overcome a key concern about taking the benchmark interest rate below 1 percent, two euro-area central bank officials said. The likelihood that such a move would also involve cutting the rate the ECB pays banks on overnight deposits from 0.25 percent is no longer an obstacle for a majority of the Governing Council, said the officials, who spoke on condition of anonymity because the deliberations aren’t public. The deposit rate traditionally moves in tandem with the benchmark and policy makers have been reluctant to take it to zero out of concern it would discourage interbank lending. A rate cut isn’t certain, the officials said. An ECB spokeswoman declined to comment.
• Central Banks Warn Euro Debt Stress Threatens World. Central banks intensified warnings that Europe’s failure to tame its debt crisis threatens to roil the world’s financial markets and economy as Greece’s election in two days looms as the next flashpoint for investors. Monetary policy makers from the U.K. to Japan and Canada sounded the alert about potential fallout from the single currency bloc’s troubles.
• Greek Vote Outcomes Range From Coalition to Euro Exit: Scenarios. Below are some frequently asked- questions on Greece’s elections on June 17 and a list of some possible outcomes after the vote.
• ECB's Asset-Backed Bond Project Is Boycotted By Dutch Banks. A Dutch financial services lobby group said its members are boycotting a European Central Bank project to improve transparency in the 1.9 trillion-euro ($2.4 trillion) asset-backed securities market. Robin Fransman, a director at the Holland Financial Centre in Amsterdam, said a commercial company shouldn’t have been chosen to run the initiative. Dutch banks are the euro region’s biggest sellers of asset-backed securities, according to data compiled by JPMorgan Chase & Co.
• Payrolls Fall in 18 States, Climb in 27. Payrolls increased in 27 states in May, while the unemployment rate climbed in 18, indicating progress in the U.S. labor market remains uneven.
• Consumer Sentiment Gauge Declines to '12 Low. Confidence among U.S. consumers declined in June to the lowest level this year as the labor market showed few signs of improving. The Thomson Reuters/University of Michigan index of consumer sentiment fell in June to 74.1 from 79.3 the prior month, which was the highest since October 2007. The gauge was projected to fall to 77.5, according to a median forecast of 66 economists surveyed by Bloomberg News. A pace of job growth that’s slowed for four straight months and wage gains that are failing to keep pace with inflation are offsetting cheaper prices at the gas pump. At the same time, households may be feeling less wealthy as Europe’s debt crisis roils share prices, raising the risk that consumer spending will stagnate. The Michigan survey’s index of current conditions asks Americans whether they’re better off than they were a year ago and if they think it’s a good time to buy big-ticket items like cars. In June that measure eased to 82.1 from 87.2. The index of consumer expectations for six months from now, which more closely projects the direction of consumer spending, decreased to 68.9, also the lowest this year, from 74.3, which was the highest since July 2007. Over the next five years, the figures tracked by Fed policy makers, Americans expected a 2.9 percent rate of inflation this month compared with 2.7 percent in May.
• U.S. Industrial Production Unexpectedly Fell .1% in May. Industrial production in the U.S. unexpectedly fell in May for the second time in three months as factories turned out fewer vehicles and consumer goods. Output at factories, mines and utilities decreased 0.1 percent last month after a revised 1 percent gain in April, the Federal Reserve reported today in Washington. Economists forecast a 0.1 percent advance, according to the Bloomberg News survey median. Manufacturing, which makes up about 75 percent of total production, dropped 0.4 percent last month.
• Potash May ending inventory up ~113k mt M/m, back above 3m mt and 43% above 5-yr avg.; data released last night on Potash Corp. website via The Fertilizer Institute. Exposure to potash(as % of 2011 revenue): (IPI) 89%, (POT) 46%, K+S 41%, (MOS) 31%. (POT) and (CF) present at RBC Global Mining & Materials Conf. next week.
• Rajat Gupta Convicted of Insider Trading by U.S. Jury. Rajat Gupta, who reached the pinnacle of corporate America as managing partner of McKinsey & Co. and as a director at Goldman Sachs Group Inc. and Procter & Gamble Co. (PG), was convicted by a federal jury of leaking inside information to hedge-fund manager Raj Rajaratnam. Gupta, 63, was found guilty of securities fraud and conspiracy by a federal jury in Manhattan today in its second day of deliberations. Securities fraud carries a maximum prison sentence of 20 years, and conspiracy carries a five-year maximum. Gupta will remain free on bail until his sentencing on Oct. 18.
• Banks With High Derivatives Concentration May Be Too-Big-to-Fail. Regulators will probably view six banks with 75% of the U.S.'s derivatives assets and liabilities as too-big-to-fail, according to a Fitch Ratings analyst. A Fitch study released last week found that three-fourths of derivatives assets and liabilities among 100 big U.S. firms reside in six banks - Bank of America(BAC), Citigroup(C), Goldman Sachs(GS), JPMorgan(JPM), Morgan Stanley(MS) and Wells Fargo(WFC). The report is the first to quantify how derivatives are concentrated across all sectors.
• Oil Falls on Concern That Economy is Slowing. Oil fell on concern a slowing U.S. economy will reduce demand for oil. Futures dropped as much as 0.6 percent as data showed U.S. industrial production unexpectedly fell in May and confidence among U.S. consumers declined in June to the lowest level this year. Greek elections June 17 may determine whether the country remains in the euro bloc. The Federal Reserve starts a two-day meeting June 19. “On the economic front, the numbers are just bad and crude could get down even below the $80 mark,” said Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisors. “People are trying to position themselves for the Greek elections and the Fed meeting.” Crude for July delivery slid 30 cents, or 0.4 percent, to $83.61 a barrel at 12:37 p.m. on the New York Mercantile Exchange. The contract climbed to $84.80 earlier. Prices are down 0.6 percent this week and 15 percent this year. Brent oil for August settlement rose 8 cents to $97.25 a barrel on the London-based ICE Futures Europe exchange.
• Gold Traders Bullish as Hedge Funds Increase Wagers. Twenty-four analysts surveyed by Bloomberg said they expect gold to gain next week and six were bearish. A further three were neutral. Speculators boosted net-long positions by 27 percent in the week ended June 5, the latest Commodity Futures Trading Commission data show. ETP holdings rose 21.07 metric tons valued at $1.03 billion since the start of June, halting a three-month retreat, according to data compiled by Bloomberg.

Wall Street Journal:

• U.S. To Stop Deporting Some Illegal Immigrants. The Obama administration said it wouldn't deport many younger illegal immigrants who came to the U.S. as children, a major shift in the middle of an election season where the Hispanic vote could be pivotal. The new rules, sidestepping Congress after years of stalemate over an immigration overhaul, came in response to frequent pleas by Hispanic and other groups for more lenient treatment of people who came to the U.S. illegally as youngsters. The move quickly drew criticism from those who want a tougher stance on illegal immigration and oppose what they call amnesty. The new rules apply to people who came to the U.S. under the age of 16, haven't committed a major crime and are currently under 30. They will be eligible for a two-year period of "deferred action," where they could apply for work permits and wouldn't be deported.
• Risking Risks Threaten Recovery. The U.S. economy is losing momentum just as global events are threatening a create new shocks to the system. New data this week provided more evidence that the economic recovery is sputtering for the third year in a row. Layoffs are rising, factory output is falling and consumers are cutting spending amid rising uncertainty. Moreover, those warning signs mostly predate the worst of the recent turmoil in Europe, which has hit financial markets and hurt demand for American products overseas.
• Egypt's Muslim Brotherhood Pins Hopes on Vote. With security beefed up on the eve of Egypt's presidential runoff election, the Muslim Brotherhood tried to salvage its hopes for leadership urging voters to back its candidate instead of calling for mass protests.
  

Fox News:

• EPA Proposes Stricter Standards for Soot Pollution. The move by the Environmental Protection Agency won immediate support from environmental groups and public health advocates, who said the EPA was protecting millions of Americans at risk of soot-related asthma attacks, lung cancer, heart disease and premature death. But congressional Republicans and industry officials called the proposal overly strict and said it could hurt economic growth and cause job losses in areas where pollution levels are determined to be too high. "EPA's proposal could substantially increase costs to states, municipalities, businesses and ultimately consumers without justified benefits," said Howard Feldman, director of regulatory and scientific affairs for the American Petroleum Institute, the top lobbying group for the oil and gas industry. Feldman said the rule could discourage economic investment in counties that fail to meet new federal standards, including in political swing states such as Ohio and Pennsylvania, where a natural gas drilling boom has boosted the local economies. "Non-attainment means non-investment" by industry, Feldman said.

CNBC.com:

• Merkel Takes Swipe at France as Tensions Grow. Germany's Angela Merkel criticized France's economic performance on Friday in a growing war of words with its new Socialist President Francois Hollande over how to tackle Europe's deepening debt crisis. Describing her own country as Europe's "stabilizing anchor and growth engine", the center-right chancellor told German business leaders that Europe should talk about the growing gap between the bloc's two biggest economies and traditional allies. Tension has risen so much that French Prime Minister Jean-Marc Ayrault felt moved to deny that his country was trying to form a united front with Italy and Spain against Merkel and her drive for austerity in the single currency zone. But Merkel, possibly irritated by Hollande's meeting with German center-left opposition leaders earlier this week on euro zone policy, took what looked like a swipe at his expansive policy ideas such as a new decree partially lowering the pension age, which was part of his election campaign. "If you look for instance at the development of unit labor costs between Germany and France in the past 10 years, then you see that at the start of the millennium Germany looked rather worse or at best as good as our neighbor in a lot of factors, while the differences have now been growing a lot more strongly, also a topic that must be discussed in Europe, naturally," she said.
• Forthcoming Facebook(FB) Motion Said to Discuss Nasdaq's(NDAQ) Role in IPO.
  

Business Insider:

• Traders Are Betting That These 14 Banks Will Default.
• DOWNGRADE-MAGEDDON 2012: Here Are The Gigantic Banks On Moody's Chopping Block.
• JC Penney(JCP) Rebranding Is Driving Its Core Customers AWAY From The Store.
• This New Drone Will Radically Enhance Navy Surveillance Capabilities.

Zero Hedge:

• Spain Bond Drubbing Continues as Stocks Surge. (graph)
• On The Keynesian Lunacy of Targeting Outcomes.
• The Greek Decision Has Grown Spanish Branches.
  

FINalternatives:

• Q1 Hedge Fund Launches Total 304. The first quarter of 2012 saw the launch of 304 hedge funds as industry assets hit a record $2.13 trillion, according to Hedge Fund Research. On the flip side, hedge fund closures were also up in Q1, at 232; the highest liquidation rate since Q1 2010, when 240 funds closed. More funds of hedge funds closed than opened in Q1 2012, according to HFR, with 64 closing compared to 34 launching. The quarter was the fourth consecutive in which the number of funds of funds declined.

Gallup:

• Obama Job Approval: 49% Disapprove, 44% Approve. (graph)
  

Reuters:

• Bundesbanker says no more leeway for Spanish banks. The European Central Bank will not give Spanish banks more leeway to access its funding operations, a Bundesbank board member said, warning that Sunday's election in Greece may not herald the clarity some in the market are hoping for. The European debt crisis may reach new heights next week as Greek elections on Sunday could bring to power the SYRIZA party which rejects EU/IMF bailout program terms, while Spain is on the verge of requesting international aid for its teetering banks. "Regardless of the election outcome on Sunday, it will need to be decided quickly whether Greece's second bailout program is on track or whether the new government will get it back on track," Bundesbank board member Joachim Nagel told Reuters. "Uncertainty will continue as long as there is no reliable prospect for how things will progress in Greece," he said, adding that Greek risks would be manageable for German banks. Nagel chose a football analogy to get his point across: "The ball is now in the politicians' half and is getting closer to the goal line."
• NY Fed: Manufacturing Growth Slowest Since November 2011. A gauge of manufacturing in New York state fell sharply in June to its lowest level since November 2011 but still showed growth, the New York Federal Reserve said in a report on Friday. The New York Fed's "Empire State" general business conditions index fell to 2.3, a 15-point drop from the month before and the lowest level since November 2011, and far below economists' expectations of 13. Employment gauges also dropped, and indexes for the six-month outlook fell for the fifth consecutive month to 23.1, suggesting waning optimism about the medium-term. The shipments index dropped 19 points to 4.8, and the prices paid and new orders indexes also fell to their lowest levels since November 2011.
• S&P Against Rings Alarm Bells on US Refinancing Wall. Standard & Poor's again sounded the alarm bells about an impending wall of refinancing for US companies in the next four years, this time highlighting the potential stress for financial and speculative-grade companies. S&P said US corporate issuers had around $1.38 trillion of debt maturing through year-end 2013, and warned that the greatest refinancing risk was within the Single B and Triple C categories from 2013 through 2016.

Telegraph:

• Gordon Brown: France and Italy May Need a Bail-Out. Gordon Brown: France and Italy may need a bail-out. Gordon Brown has warned the euro is reaching its "day of reckoning" and suggested France and Italy would follow Spain in needing a bail-out as the eurozone crisis deepens.
• IMF Urges Europe to Help Refinance Irish Bank Bail-Out. The International Monetary Fund on Friday urged Europe to help Ireland refinance its crippling bank bailout and consider taking equity in state-owned banks to help Dublin return to bond markets and avoid a second bailout next year.

Radio Free Europe Radio Liberty:

• Egypt's Islamists Warn of 'Dangerous Days' After Parliament Dissolved. The Muslim Brotherhood has warned that Egypt faces "dangerous days" ahead, after the Supreme Constitutional Court dissolved the Islamist-dominated parliament. The court ruled on June 14 that last year's elections for the lower house of parliament, the country's first free elections in decades, were unconstitutional.

Caixin:

• The Beijing government recommended companies to raise base wages by 11.5%, citing 2012 salary guidelines published by the local government.

Bear Radar

Style Underperformer:

• Large-Cap Value +.43%

Sector Underperformers:

• 1) Airlines -.87% 2) Oil Tankers -.30% 3) Construction -.01%

Stocks Falling on Unusual Volume:

• IVN, GNC, LUV, RIC, NRG, CPN, TTWO, CHKP, NANO, ERF, IIVI, QCOM, FELE, SHOO, HAYN, ONXX, TRN, TGI, SDT and AIR
  

Stocks With Unusual Put Option Activity:

• 1) TC 2) GFI 3) FTR 4) MNST 5) NYX
  

Stocks With Most Negative News Mentions:

• 1) IIVI 2) TRN 3) LSCC 4) POT 5) GOOG
  

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume
  

Bull Radar

Style Outperformer:

• Mid-Cap Growth +.79%

Sector Outperformers:

• 1) Software +1.64% 2) Coal +1.36% 3) Alt Energy +1.33%

Stocks Rising on Unusual Volume:

• RP, YPF, OMPI, BVSN, ASIA, LNCR, QCOR, ENDP, NAV, LNG, ICE, RCL and DRI
  

Stocks With Unusual Call Option Activity:

• 1) SQNM 2) ITUB 3) ABV 4) FXY 5) KOG
  

Stocks With Most Positive News Mentions:

• 1) LMT 2) NUAN 3) COO 4) ICE 5) TDC
  

Charts:

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume

Friday Watch

Evening Headlines
Bloomberg:

• Greeks Return to Ballot Box, Pivotal Moment. Greeks head to the ballot box in two days for a contest that may determine the fate of the world’s first democracy and the future of the newest reserve currency, while roiling markets from Wellington to Wall Street. Almost 10 million Greeks will vote for the second time in six weeks after a May 6 ballot failed to yield a government. The constitution permits a third election too. The final polls, published on June 1, showed no party set to win a majority. Exit polls will be released when voting ends at 7 p.m. in Athens, with a first official result estimate due around 9:30 p.m. The June 17 vote will turn on whether Greeks, in a fifth year of recession, accept open-ended austerity to stay in the euro or reject the conditions of a bailout and risk the turmoil of becoming the first to exit the 17-member currency.
• Spain Grazing Junk Status Fuels Contagion Risk: Euro Credit. Spain's slide down the credit-rating ladder has brought the nation within a hair of junk status and risks triggering contagion in Italy and beyond should investors completely shun the bonds of Europe's fourth-richest economy. Moody's said Spain's decision to seek as much as 100 billion euros of European funds to shore up its banks increased the risk the country would need a full bailout. Spain's aid request and the credit rating reduction have increased foreign investor flight from its bonds, leaving the Treasury increasingly reliant on the soon-to-be rescued domestic banking industry to buy its debt. "Junk status would be serious and would confirm it is locked out of the capital markets," said Marc Chandler, head of global currency strategy at Brown Brothers Harriman in New York. "It would mean the bank aid turns into a full-fledged aid package, redouble pressure on Italy and France while Portugal would take another hit."
• ING Bank Cut as Moody’s Downgrades Five Dutch Banking Groups. ING Bank NV, Rabobank Nederland and three other Dutch banking groups had their credit ratings cut by Moody’s Investors Service, which cited their reliance on wholesale funding amid a recession and Europe’s debt crisis. Long-term debt and deposit ratings at ING Bank, Rabobank Nederland, ABN AMRO Bank NV and LeasePlan Corporation NV were lowered by two grades, and SNS Bank NV received a one-level cut, Moody’s said in a statement in Frankfurt today. “Dutch banks will face difficult operating conditions throughout 2012 and possibly beyond,” Moody’s said in the statement. ING Bank’s ratings have a negative outlook and those of the other lenders are stable, it said. Separately, Moody’s also downgraded UniCredit Leasing S.p.A by two levels to Baa2 from A3.
• Draghi Fails to Find Clarity in ECB Communication. European Central Bank President Mario Draghi is struggling to find the right balance between saying too much and nothing at all. Draghi won praise for his candor when he took the helm of the ECB seven months ago. Since then, he has kept investors guessing on three key Greek initiatives and confused some of them on the outlook for ECB bond purchases, whipsawing the euro and Italian and Spanish bonds. Economists from Nomura International Plc to ING Group NV say Draghi’s communication is exacerbating market turmoil. “Since the first press conference when Draghi came in with a very confident style, it has basically been downhill on the communication front,” said Nick Kounis, head of macro research at ABN Amro in Amsterdam. “Clearly the communication has sometimes created the wrong impression, and that makes markets that bit more volatile.”
• Irish Tell Spain to Imagine the Worst and Burn Bank Bondholders. Ireland has this banking advice for Spain: imagine the worst and double it. Like Ireland, Spain sought a bank bailout after being felled by a real-estate crash. Now, just as the Irish did, the Spanish are awaiting the results of outside stress tests gauging the size of the hole in the banking system. "Think of the worst possible scenario on banking losses: then double it," said Eoin Fahy, an economist at Kleinwort Benson Investors in Dublin. "Adopt the most conservative assumptions." Nine hundred miles northwest of Madrid, Irish analysts wring three lessons from its own banking crisis, among the worst in history. First, quickly present an accurate estimate of the bad loans. Second, force banks to face up to losses, possibly through the creation of a so-called bad bank. Third, share as much of the loss as possible with bank bondholders. "Spain should face the economic reality, even if they have to value property loans at discounts of 40, 60 or even 80 percent," said Alan Ahearne, former economic adviser to Brian Lenihan, the finance minister who presided over Ireland's response to the near-collapse of its financial system. "If the real losses aren't faced up to, who's that going to fool?"
• France Plans Tax Changes to Raise 10 Billion Euros, Echos Says. The French government plans to propose revisions in tax laws to raise an additional 10 billion euros ($12.6 billion) in revenue to reduce the country’s budget deficit, Les Echos reported. Changes to the law will include higher inheritance taxes, an end to exemptions for payroll taxes on overtime the reestablishment of the wealth tax schedule and measures to reduce tax loopholes used by large companies, the newspaper said, without saying where it got the information. A proposed adjustment in capital taxes to the same level as salaries is planned for the fall, Figaro said.
• The EU Smiled While Spain’s Banks Cooked the Books. Only a few years ago, Spain’s banks were seen in some policy-making circles as a model for the rest of the world. This may be hard to fathom now, considering that Spain is seeking $125 billion to bail out its ailing lenders.
• Does China's Next Leader Want the Job? Anyone who thinks their job stinks should consider the one Xi Jinping is about to take on. Xi is expected to replace Chinese President Hu Jintao in the fall. He must have some serious misgivings. If the last 20 years were a golden age for the world’s most populous nation, today is one filled with growing doubts. The Bo Xilai scandal has shattered the veneer of political stability, cyber- dissidents are emboldened in their challenges of the Communist Party and diplomatic headaches abound -- many of them concerning the U.S., where China may figure in November’s presidential election. No issue looms larger than China’s suddenly shaky economy. The world is now bracing for a slowdown that pundits said was unlikely to happen. So are officials in Beijing, who worry that social unrest could boil over quickly if growth evaporates. All stimulus and no reform gives China some Frankenstein- like qualities -- a powerful economic creature born out of unorthodox experiments. Unproductive spending of the magnitude China already has unleashed, and what seems to be in the pipeline, may result in a Japan-like debt mess. When China’s reckoning does come, and every industrializing nation has one, it may be far worse than investors believe. Xi will have to do a much better job than his predecessor to keep that reckoning from becoming a monster all its own.
• Iron-Ore to Slump as China Slows, Eurofer Says. Iron-ore prices will tumble over two years as growth in Chinese demand stalls and new mines increase supply, according to Eurofer, a lobby for steelmakers including ArcelorMittal that are among the biggest buyers of the material. Chinese steel output growth is forecast to fall by 50% to less than 5% from 2013, compared with last year, as iron-ore production climbs to more than 1.4 billion metric tons by 2015, according to Macquarie Group Ltd. data. The trend may see ore prices drop to as low as $80 a ton, Eurofer said. In contrast, the lowest price among analyst estimates compiled by Bloomberg is $100 by 2015 from Toronto-Dominion Bank. The spot price was $134.70 yesterday.
• O'Neill's BRICs Risk Hitting Wall in Threat to G-20 Growth. Even Jim O'Neill is asking whether the BRICs need reinforcing 11 years after he coined the term to describe the world's future powerhouse economies. O'Neill, chairman of Goldman Sachs Asset Management, says his thesis that Brazil, Russia, India and China would together increasingly buoy the global economy faces "a more challenging test" as investors dump the countries' stocks. China pared its growth target to the lowest since 2004, Standard & Poor's may cut India's investment-grade credit rating, Brazil is on pace to expand less than 3 percent for a second straight year and falling oil prices may hurt Russia. A prolonged slowdown in the four countries poses a fresh threat to a world economy suffering its weakest spell since the end of the 2009 recession, which the BRICs helped shorten by contributing about half of the international expansion since 2007. Leaders attending next week's Group of 20 summit in Mexico are already expressing concern, with Brazilian President Dilma Rousseff warning June 4 that emerging markets can't carry the weight of the world on their shoulders. Rich-nation policy makers "are so wrapped up in their own problems they're praying some of this weakness is just temporary in the BRICs," London-based O'Neill, 55, said in a telephone interview. "If it's not, then it's pretty worrying."
• Oil Rout Has China Hoarding Most Since Olympics: Energy Markets. China is hoarding crude at the fastest rate since the Beijing Olympics four years ago as the slump in international prices prompts it to import unprecedented volumes even as refining slows. The world's second-biggest oil consumer built up a surplus of about 90 million barrels of crude in the first five months of the year, government data show. The excess, the most since the run-up to the 2008 games, is probably being kept at emergency and commercial storage centers, according to the IEA.
• Fannie Mae, Freddie Mac REO Costs Top $8.5 Billion, Auditor Says. Fannie Mae and Freddie Mac have spent $8.5 billion on foreclosed homes since 2007, the Federal Housing Finance Agency’s auditor said in a report urging the regulator to ensure taxpayer money isn’t being wasted. The FHFA, which has overseen the government-sponsored enterprises since they were seized during the credit crisis in 2008, must ensure Fannie Mae and Freddie Mac can cope with the surge of so-called real-estate owned properties on their books as a result of defaults on loans they guarantee, the agency’s Office of Inspector General said in the report released today.
• Ex-Soros Adviser Fujimaki Says Japan to Probably Default by 2017. Investors should buy assets in U.S. dollars and other currencies of strong developed nations because Japan may default within five years, said Takeshi Fujimaki, former adviser to billionaire investor George Soros. “Japan is likely to default before Europe does, which could be in the next five years,” the president of Fujimaki Japan, an investment advising company in Tokyo, said in an interview yesterday. Japanese should hold foreign-currency products, such as those denominated in the greenback, Swiss franc, sterling, Australian and Canadian dollars, Fujimaki said. Japan’s public borrowings, the world’s biggest, will balloon to 245.6 percent of its annual economic output in 2014, up from 67.3 percent in 1984, an estimate by the International Monetary Fund shows. Japanese Prime Minister Yoshihiko Noda is struggling to gather support for his plan to double the 5 percent sales tax by 2015 to help reduce debt. “The yen and the JGB market are in a bubble,” Fujimaki said. “With the gigantic debt Japan has accumulated, a thin needle, or even a gentle breeze may pop this. Events in Europe can possibly trigger this to blow up.”
• BOJ Holds Policy Ahead of Greek Vote With Eye on Global Markets. The Bank of Japan (8301) kept the size of its asset-purchase fund unchanged two days before a Greek election that may determine whether Europe’s crisis worsens, and said it will pay “particular” attention to global markets.

Wall Street Journal:

• Sour Mood of Greeks Makes Vote a Cliffhanger. On Sunday, Greece's future in the euro zone will be in the hands of voters like Kety Bakirtzoglu: longtime backers of the entrenched political establishment who feel burned and are ready to roll the dice on something new. For years, Ms. Bakirtzoglu was a stalwart socialist voter from the Pasok party's core, Greece's giant public sector. Then, as part of a bid to meet austerity goals mandated by its bailout, the socialist government pushed her out of her job at a state housing agency.
• Egypt's Elections in Turmoil After Rulings Boost Military. Egypt's 16-month transition toward democracy was thrust into turmoil just two days before the country's historic presidential election, as the country's highest court dissolved the Islamist-dominated parliament and its top generals took over legislative powers. Egypt's highest court stunned the country with two rulings Thursday. One effectively dissolves both houses of the country's parliament. A second overturned a law that would have barred a former regime loyalist from contesting the presidential runoff to be held Saturday and Sunday.
• Banks' Bad Debts Weigh on Vietnam. Vietnam's government is under pressure to find ways to reduce the country's spiraling bad debts, which have raised fears of loan problems cropping up elsewhere in Asia.

Business Insider:

• Now They've Invented Laser-Guided Bullets So Snipers Can Kill You From 2 Miles Away.
• Democratic Pollster: Obama's Negative Tone And Messaging Is Going To Lose Him Michigan.
• CHART OF THE DAY: This Chart Destroys The Idea Of Peak Oil.

Zero Hedge:

• S&P: "Spanish Home Prices To Drop Another 25%".

CNBC:

• Why Joint Central Bank Action Is Unlikely and Won’t Work. Speculation that major central banks are planning coordinated action heightened on Friday on a media report that Group of 20 nations are preparing to provide liquidity to financial markets.
• A Global Recession? The Warning Signs Are Everywhere.

IBD:

• EBay(EBAY) Goes Brick-And-Mortar, Tags Future To Mobile Too.

Forbes:

• U.S. Video Game Retail Sales Slump 28% in May Vs. Yr Ago.

Mediaite:

• Joe Klein Pans Obama Speech On MSNBC: ‘Failed Profoundly To Explain What He’s Done’. (video)
  

Rasmussen Reports:

• Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Thursday shows Mitt Romney attracting 48% of the vote, while President Obama earns 44%. Four percent (4%) prefer some other candidate, and another four percent (4%) are undecided.

Reuters:

• Credit hedge funds profit despite rocky markets. In a year of uneven returns for many U.S. hedge funds, managers who invest mainly in bonds have outshone stockpickers. Over the first five months of the year, credit-focused hedge fund portfolios were up 4.11 percent compared with a 2.4 percent gain for stock-focused ones, according to hedge fund tracking service eVestment|HFN.

Financial Times:

• 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. The so-called Basel III rules will impose capital and liquidity requirements that were designed for US and Europe institutions but would be difficult to implement in emerging economies, according to a report set to be issued on Sunday by the B20 group of businesses, which advises the G20 group of nations.
• Post-crash malaise takes toll on CDS. Credit derivatives, where investors and speculators trade default risks of sovereigns and corporates, are a pale shadow of the boom market that was being aggressively touted by Wall Street just a few years ago.
• Egypt Bombshell Has Echoes of Algeria. For many Egyptians – not least the Muslim Brotherhood, which won the biggest share of seats in the legislature – the decision by a court packed with appointees from the ousted political order was seen as the most damaging move in a well-planned counter-revolution, engineered by the ruling military and remnants of the old regime. Across the Arab world, it will revive memories of Algeria in 1991, when the army cancelled a second round of elections to derail a victory by an Islamist party, plunging the country into a decade-long civil war.
• Central bankers brace for euro break-up. At least one country will leave the eurozone in the next five years, according to a survey of central bank reserve managers who collectively control more than $8,000bn.

Telegraph:

• Debt crisis: ECB last hope as dam breaks in Spain. Spain's borrowing costs have surged to record highs and are perilously close to the point of no return, threatening a full-blown sovereign crisis unless the European Central Bank comes to the rescue.
• Funding lifeline for the banks highlights how deep the crisis is. Last night's announcement of £140bn in cheap funding for banks is fundamentally an acknowledgment of the storm to come ahead of a deepening eurozone crisis. This is a lifeboat worth nearly 10pc of GDP. Things really are that bad.

Evening Recommendations

• None of note

Night Trading

• Asian equity indices are -.50% to +1.0% on average.
• Asia Ex-Japan Investment Grade CDS Index 183.0 -7.0 basis points.
  
• Asia Pacific Sovereign CDS Index 150.50 -1.5 basis points.
  
• FTSE-100 futures +.23%.
  
• S&P 500 futures +.11%.
  
• NASDAQ 100 futures +.17%.

Morning Preview Links

Earnings of Note
Company/Estimate

• None of note
  

Economic Releases
8:30 am EST

• Empire Manufacturing for June is estimated to fall to 13.0 versus 17.09 in May.

9:00 am EST

• Net Long-term TIC Flows for April are estimated to rise to $45.0B versus %36.2B in March.

9:15 am EST

• Industrial Production for May is estimated to rise +.1% versus a +1.1% gain in April.

• Capacity Utilization for May is estimated at 79.2% versus 79.2% in April.

9:55 am EST

• Preliminary Univ. of Mich. Consumer Confidence for June is estimated to fall to 77.5 versus 79.3 in May.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The ECB's Draghi speaking and BoJ interest rate decision could also impact trading today.
  

BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and financial shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.

Stocks Higher into Final Hour on Global Central Bank Stimulus Hopes, Short-Covering, Bargain-Hunting

Broad Market Tone:

• Advance/Decline Line: Higher
  
• Sector Performance: Most Sectors Rising
  
• Volume: Below Average
  
• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• VIX 22.23 -8.12%
  
• ISE Sentiment Index 145.0 +66.67%
  
• Total Put/Call 1.08 -15.63%
  
• NYSE Arms .48 -59.75%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 122.24 -2.10%
  
• European Financial Sector CDS Index 285.98 -1.06%
  
• Western Europe Sovereign Debt CDS Index 321.33 +.34%
  
• Emerging Market CDS Index 289.81 -4.49%
  
• 2-Year Swap Spread 30.0 -.25 basis point
  
• TED Spread 37.0 -1.25 basis points
  
• 3-Month EUR/USD Cross-Currency Basis Swap -54.0 +.25 basis point
  

Economic Gauges:

• 3-Month T-Bill Yield .10% +1 basis point
  
• Yield Curve 133.0 +3 basis points
  
• China Import Iron Ore Spot $134.70/Metric Tonne +.75%
  
• Citi US Economic Surprise Index -54.50 -.9 point
  
• 10-Year TIPS Spread 2.10 unch.
  

Overseas Futures:

• Nikkei Futures: Indicating a +9 open in Japan
• DAX Futures: Indicating +3 open in Germany
  

Portfolio:

• Slightly Higher: On gains in my medial, retail and biotech sector longs
  
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges, then covered some of them
  
• Market Exposure: 50% Net Long

Today's Headlines

Bloomberg:

• Spanish Yields Rise to Euro-Era Record After Moody's Cuts Rating. Spain's bonds slumped, with 10-year yields rising to a euro-era record, after Moody's Investors Service cut the nation's credit rating to one step above junk, citing its rising debt burden and weakening economy. Italy's 10-year yield reached the highest level in almost five months after its borrowing costs surged at a sale of 4.5 billion euros ($5.65 billion) of three-, seven- and eight-year notes. Spanish 10-year bonds have dropped all four days this week after the nation requested as much as 100 billion euros of aid for its banks last weekend. German bunds gained. The "markets are telling us that they're unconvinced by the bank bailout and that the next step is that the government will have to concede, capitulate, and go for a sovereign loan," James Stewart, head of macro research at AX Markets in London, said in an interview with Mark Barton on Bloomberg Television's "Countdown." "That seems to me quite likely, and even now I think it's moving on from Spain to Italy." Spain's 10-year yield climbed 20 basis points, or 0.2 percentage point, to 6.95 percent at 1:27 p.m. London time after rising to 6.998 percent, the highest since the euro was introduced in 1999. The 5.85 percent bond due in January 2022 fell 1.305, or 13.05 euros per 1,000-euro face amount, to 92.405. The yield has jumped 74 basis points this week.
• Merkel Rejects Quick Fix to European Debt Crisis. Chancellor Angela Merkel rejected quick solutions proposed to fix Europe’s financial crisis such as joint debt sharing, saying Germany can’t save the world economy alone and fellow Group of 20 countries must help. Merkel, in a speech to parliament in Berlin today, said the debt crisis and Germany’s role in stemming it will be the “central topic” at next week’s G-20 summit in Mexico. While Germany will use its strength “in the service of European unity,” the euro and the global economy, Merkel said she opposes “seemingly easy” solutions that risk backfiring. “All eyes are on Germany,” she said. “But we also know that Germany’s power is not infinite. So our responsibility as Europe’s largest economy is to deploy our strength credibly, so that we can be of full use to Europe.” Merkel signaled a showdown with global peers at the June 18-19 meetings over ending the crisis that has made Spain the fourth euro-area country to need a bailout and driven up Italy’s borrowing costs.
• European Stocks Fall A Second Day; BSkyB, BT Group Slide. European stocks dropped for a second day as Moody’s Investors Service downgraded Spain and Cyprus, while Switzerland’s central bank said that Credit Suisse Group AG (CSGN) must increase its capital this year. Credit Suisse slumped 10 percent to its lowest price since 1992. British Sky Broadcasting Group Plc (BSY) and BT Group Plc (BT/A) tumbled 3.5 percent each, after winning the rights to show live English Premier League soccer matches by paying an extra 70 percent. Nokia Oyj (NOK1V) plunged 18 percent after reducing its outlook for the second quarter.
• Germany’s Haven Status Fades as Crisis Bill Mounts: Euro Credit. The haven status that drove German yields to record lows is fading as the fourth bailout of a euro member stokes investor concern that the currency bloc’s biggest economy will be left picking up a mounting tab. “If the euro region continues, then there must come a time when there is a fiscal union and burden-sharing, and that would make the market think more deeply about the creditworthiness of Germany,” said Ralf Ahrens, who helps manage about $20 billion as head of fixed income at Frankfurt Trust. The discount Germany enjoys relative to the U.S. for 10- year borrowing has narrowed to the least in more than three months after Spain asked for a 100 billion-euro ($125 billion) lifeline for its banks on June 9. Traders of credit-default swaps also are buying protection against the risk of losses on German bonds, with the costs of insuring the nation’s debt surging to the most since January compared with similar contracts on U.S. debt. “There is a greater awareness now that the outcome of this crisis could well be quite painful for the German economy,” said Ciaran O’Hagan, a strategist at Societe Generale SA in Paris. “The contingent liability on Germany is rising. The losses we have seen have to be paid for by somebody and there is a sentiment that taxpayers in the rest of Europe are not going escape unscathed.”
• German Family-Owned Firms Doubt Euro, Merkel, Handelsblatt Says. Germany’s Foundation for Family Business said a growing number of entrepreneurs doubt that the euro will endure as a currency, Handelsblatt reported, citing Brun-Hagen Hennerkes, the foundation’s executive board chairman.
• Greek Stock Rally on Optimism New Democracy Will Win. Greek stocks rallied the most in more than nine months, while a gauge of banks jumped 21 percent, amid speculation that New Democracy, the party that backs an agreed bailout for the nation, may win the June 17 elections.
• Spanish Banks' Net ECB Loans Jump To Record 288 Billion Euros. Spanish lenders’ net borrowings from the ECB jumped to a record 287.8 billion euros ($361.4 billion) in May, highlighting the thirst of the financial system for funding before the country’s banking bailout. Net average ECB borrowings climbed from 263.5 billion euros in April, the Bank of Spain said on its website today. Gross borrowing was 324.6 billion euros in May, up from 316.9 billion euros in April. The increase in ECB borrowings “conveys the severity of the predicament some banks found themselves in ahead of last week’s bailout,” Martin van Vliet, an economist at ING Bank in Amsterdam, said in an e-mailed comment.
• Credit Suisse(CS) Urged by Central Bank to Boost Capital. Credit Suisse Group AG (CSGN) needs a “marked increase” in capital this year to prepare the bank for a possible worsening of Europe’s sovereign-debt crisis, the Swiss central bank said. The shares fell as much as 11 percent. “For Credit Suisse, given the low starting point and the risks in the environment, it is essential that it already substantially expand its loss-absorbing capital base during the current year,” the Swiss National Bank said in its annual financial stability report today. The central bank, which also recommended UBS AG (UBSN) boost capital, said improvements can be achieved by suspending dividend payments or selling new shares in addition to the banks’ plans for cutting assets.
• Jobless Claims in U.S. Unexpectedly Rose Last Week. Claims for unemployment insurance payments unexpectedly climbed by 6,000 to 386,000 in the week ended June 9, Labor Department figures showed today in Washington. Economists projected jobless claims would fall to 375,000 from a previously reported 377,000 the prior week, according to a Bloomberg survey of 49 economists. Estimates ranged from 370,000 to 385,000. The unemployment insurance report showed the four-week moving average of claims, a less-volatile measure, climbed to 382,000, the highest since April 28, from 378,500.
• Consumer Prices in U.S. Fall. The consumer-price index declined 0.3 percent, more than forecast and the biggest drop since December 2008, after no change the prior month, the Labor Department reported today in Washington. Economists projected a 0.2 percent decrease, according to the median estimate in a Bloomberg News survey. The so-called core measure, which excludes more volatile food and energy costs, increased 0.2 percent for a third month.
• California Hedge Fund Is Latest Euro Crisis Casualty. Hedge-fund manager Paul Sinclair is the latest casualty of Europe’s sovereign-debt turmoil, almost six thousand miles away from the epicenter of the crisis. Sinclair, who is based in Los Angeles, is liquidating his $458 million health-care equities fund, Expo Capital Management LLC, after more than five years, as political decisions made on the other side of the globe have undermined his stock picks and spurred losses for a second year.
• Ship Rates to Reach 22-Year Low as More Vessels Leave Yards.. Hire costs for Capesize ships, the largest carriers of iron ore and coal, are poised to reach the lowest level in at least 22 years after more vessels left yards. Daily charter rates will average less than $10,000 this year, Oslo-based investment bank Arctic Securities ASA said today in an e-mailed note. It lowered a prior estimate after shipyards delivered a larger-than-expected number of new vessels, outpacing demand and weighing on hire costs.
• Oil Climbs on Speculation About Fed Stimulus, OPEC Output. Crude gained on speculation the Federal Reserve will loosen monetary policy to spur growth and members of OPEC will leave their production ceiling unchanged. Oil advanced as much as 1 percent as a worse-than-expected jobless claims report fueled expectations that Fed policy makers will announce new stimulus measures after a meeting next week. OPEC oil ministers in Vienna are deciding whether to keep a 30 million-barrel-a-day limit.
• China Productivity Jolt Urged as Growth Forecasts Cut: Economy. Corporate profits are falling, deflation is looming and the nation faces years of “weak” growth, Credit Suisse economist Tao Dong said. To unleash productivity gains and restore the economy’s strength, the government should break monopolies in banking and utilities, open the services industry, and deregulate interest rates and the exchange rate, he said. “Investment is unlikely to see a meaningful rebound in the foreseeable future,” Hong Kong-based Tao said. “Government stimulus could moderate the downside risks to growth and perhaps cushion the down-cycle, but we do not see it providing sustainable upward growth momentum.”
• Bank Warns of Major Canada Shock If Europe Crisis Worsens. Canada faces a “major shock” to its financial system and economy if Europe’s crisis worsens, the country’s central bank said. While Canada’s financial system has fared well and conditions in the country remain “very stimulative,” deepening turmoil in Europe may boost funding costs for the nation’s banks and generate losses from assets linked to the euro zone, the Bank of Canada said today in its semi-annual Financial System Review. Non-performing loans at Canadian banks would also increase if growth slows.
• India's Inflation Exceeds Estimates as Rate Decision Looms. Indian inflation quickened more than estimated in May as food and fuel prices surged, an acceleration that may fail to prevent an interest-rate cut next week to shore up slowing growth. The benchmark wholesale-price index rose 7.55 percent from a year earlier, after climbing 7.23 percent in April, the commerce ministry said in New Delhi today.
• Nokia(NOK) to Eliminate Up to 10,000 Jobs to Halt Mounting Losses. Nokia Oyj reduced its earnings forecast for the second time this year and said it will cut as many as 10,000 more jobs and shut production and research sites in Chief Executive Officer Stephen Elop's biggest overhaul. The stock fell 18 percent to the lowest level since 1996, pushing Nokia's market value below $10 billion.
  

Wall Street Journal:

• Spanish Crisis Deepens. The financial crisis threatening the Spanish government deepened Thursday as Spain's borrowing costs surpassed their euro-zone record. The move followed yet another sovereign credit downgrade and coincided with fresh evidence Thursday of economic and financial stress as the decline of Spanish housing prices accelerated to a 12.6% annual rate in the first quarter and Spanish banks increased their reliance on European Central Bank funding.
  
• Trade Protectionism Rises as Economies Slow. As worries rise about an economic slowdown, major nations around the world are ramping up measures to protect their economies from trade threats.
  
• Stanford Sentenced to 110 Years in Prison for Ponzi Scheme. R. Allen Stanford, the once-highflying financier convicted of masterminding a $7 billion Ponzi scheme, was sentenced Thursday to 110 years in federal prison. The punishment amounts to an effective life sentence for Mr. Stanford, who is 62 years old and used to live extravagantly aboard yachts, jets and homes around the world.

CNBC.com:

• Fed Easing: What Market Wants vs What May Happen.

Business Insider:

• THIS USED TO BE THE 10TH RICHEST SHOPPING STREET IN THE WORLD—Now Look At IT.
• China Is Desperately Reinflating The Real Estate Bubble.
• Italy Trembles On The Brink Of The Impossible.
• These Are The Weapons Facing Any Country That Intervenes In Syria.
• A Brand New Troubling Sign For The Housing Market. Despite talk of a housing bottom, new data shows that foreclosure filings jumped 9 percent from April to 205,990 according RealtyTrac's latest foreclosure report.
• Europe's Contagion Spreads into China.
  

Zero Hedge:

• Egan Jones Cuts France To BBB+, Outlook Negative.
• With Egypt On The Verge Of A Military Coup And Martial Law, Art Cashin Issues A Warning.
• Why a European Banking Union is Far From Imminent.
• Just What Is Mario Draghi Hiding? ECB Declines To Respond To Bloomberg FOIA Request On Greek-Goldman Swaps.
• Peripheral Stocks Pump As Spanish Bonds Dump. (graph)
  

Reuters:

• Analysis: Zombie Borowers Threaten Bailed-Out Spanish Banks. Spanish banks are a little jauntier after a dose of European cash to purge them of their toxic real estate assets, but their refinancing of moribund companies in other sectors could put them back in the emergency room. Whether out of optimism or desperation, Spanish banks have refinanced billions of euros of debt owed by struggling companies large and small, including property-related firms, to prevent them going bust and avoid writing down the loans while they wait for economic recovery, financial sources said. But with rising unemployment, falling consumer spending and a return to recession, any recovery looks a long way off, even after the 100 billion euro ($125 billion) lifeline that Spain's euro zone partners stumped up for its banks on June 9. "Very often banks have rather continued supporting companies on pre-insolvency scenarios instead of facing losses head on and making write-offs and forcing the company into liquidation. This has been very common," said Alberto Manzanares, refinancing expert at the Clifford Chance law firm in Madrid. The bad loan ratio in the Spanish banking system has already hit an 18-year high of 8.37 percent of outstanding loans in March as Spain's borrowing costs soared, thrusting the country into the heart of the euro zone debt crisis. Defaults are expected to rise as recession pushes more families and companies under and if a sector audit as part of the European rescue flushes out refinancing of insolvent companies.
• United Tech(UTX) Europe's Downturn Worse Than Expected. Europe's downturn has gotten worse than United Technologies Corp executives expected coming into the year, and the company is concerned about Greece's troubles spreading, a top executive at the diversified U.S. manufacturer said. "Clearly, the situation in Europe has gotten a lot worse than we had expected," Greg Hayes, the company's chief financial officer said on Thursday. "Greece doesn't bother me except for the contagion impact."

Politico:

• Layoff Threats Put Congress On Notice. Facing economic uncertainty, defense contractors are plotting to spur Congress to nix the automatic budget cuts set to begin next year. The plan? Threaten to send out layoff notices — hundreds of thousands of them, right before Election Day.
  

Financial Times:

• Merkel Stands Firm on Tackling Crisis. Angela Merkel, the German chancellor, declared on Thursday that Europe was “in a race with the markets” to turn its monetary union into a fully fledged political union, even as she warned her partners not to overburden the German economy in the eurozone crisis.

Telegraph:

• Debt Crisis: Live. Spanish borrowing costs hit record high of 7pc, a level widely-believed to be unaffordable, while the ECB says it can do no more to help debt-laden eurozone nations.
• America Will Soon Need To Take Advice It Offers Europe. It should not have been a surprise that US Treasury Secretary Timothy Geithner veered between fits of laughter and a tone of chilling gravity when he spoke to the Council on Foreign Relations in Washington this week.
• Dutch Disease. (graph) Dutch retail sales collapsed by 11pc in April, even worse than the 9.7pc drop in Spain. (Royal holidays cannot explain this). As you can see from today’s chart by Lombard Street Research, it is a sight to behold.

Capital.gr:

• Slovakia: We Will Demand That Greece Leaves The Eurozone. Slovakia supports Greece remaining in the euro zone but it should quit if it fails to honor its commitments, Slovak Prime Minister Robert Fico said on Thursday. Fico according to Reuters said Europe should do all it can to keep Greece in because there were more benefits if it stayed than if it left, but the Greeks must stick to the agreed terms of aid. "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," Fico told a news conference.
• Libyan Oil Minister Wants Oil Price above $100. Libya's oil minister Abdurahman Benyezza would like to see oil prices above $100 a barrel, he said Thursday at a scheduled meeting of the Organization of the Petroleum Exporting Countries in Vienna. "I think that price would be good for global economy" [although] the "main point is to stabilize the price," he said.