Working with Young "Smarta$$"

Well that was a fine week-what an incredible grind. I'm working with a young "problem child". Here we have someone who doesn't like being told what to do. Well...who does, but when you're new, it goes with the territory. He's got a sarcastic, smartass mouth and I finally had to tell him to cool it with the sarcasm and do his job... I can always tell when someone's done some jail time, they can't seem to figure out that they are no longer in the "cell block" and are now out on the street. Everything I say to him has some defensive remark hurled back at me. I have an unfortunate problem in that I'm a nice guy. I already see his little manipulative games and I'm not sure exactly what it's going to take to finally get him to see I'm not going to play. I worry when I think perhaps the only thing I think he understands is blunt force trauma. However, there is a silver lining, he's already endeared himself to the owner by saying alot of obnoxious things to his daughter. They've had a couple of arguments already. He's a class act. He was also a 45 minutes late to work last night. His "loose cannon" activity could very well end up getting him the boot. Did I mention that I absolutely loathe drama at the workplace?
-Derek