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Friday, June 17, 2011 Greece - there are a lot of moving pieces in Greece and Europe but the

three big issues to watch are: 1) the state of the current government; 2) will Greece get the next IMF tranche in Jul; 3) the talks between the IMF/EU/ECB/Berlin on a new bailout deal. What was incremental overnight? 1) the Greek cabinet reshuffle was announced (nothing too surprising; fin min is switched into environmental min role; key now is the confidence vote, coming up potentially this Sunday); 2) there are reports that Germany and France have reached sometime of an agreement during the Merkel/Sarkozy summit this morning on private investor involvement in a second Greek bailout (Sarkozy and Merkel have endorsed a Viennastyle bond rollover of Greek debt according to headlines Fri morning; Sarkozy calls the deal a breakthrough; the German fin min says a deal for Greece at the mtng scheduled for this Mon isnt impossible). JPM

Alan Greenspan tells Charlie Rose a Greek default is almost certain and could drive the US economy into a recession. The problem you have is that its extremely unlikely the political system will work in a way that solves Greeces crisis. The chances of Greece not defaulting are very small. Bloomberg Global regulators are settling around a consensus that would force 30 of the worlds biggest banks to maintain a capital buffer above the current Basel III standards. This buffer would be tiered, w/the biggest of the big (8 of the 30) subject to the highest requirements (2.5%). The top tier would include institutions like C, BAC, DB, HSBC, BNP, RBS, and Barclays. The next tier would include GS, MS, UBS, and CS (they would face buffer requirements totaling 2%). The 10-15 remaining institutions would face surcharges of between 0.5 and 2%. FT Budget/debt ceiling the Biden-led group of bipartisan lawmakers negotiating on the deficit is aiming to cut $4T in spending over the coming 10 yrs. Both sides continue to sound optimistic about their progress w/more meetings scheduled next week. The Big 3 buckets of entitlements, Medicare, Medicaid, and Social Security, will prob. be left unchanged while farmer subsidies and federal employee pensions could see the largest cuts. WSJ