Comments for the Net

U.S. markets were closed today for Independence Day.

• >>>>>Why Was Weak Employment A Surprise? - BusinessInsider, Richard Bernstein
• >>>>>The Scariest Jobs Chart Ever - BusinessInsider (Calculated Risk)
• Krugman: We’re Headed Right Back To The 1930s - BusinessInsider, Henry Blodget
• A ‘coup’ in Honduras? Nonsense. Don’t believe the myth. The arrest of President Zelaya represents the triumph of the rule of law - Christian Science Monitor, Octavio Sanchez
• Honduras and Iran: Obama Betrays Freedom Again — The real story behind the chaos in Honduras is a huge story that needs to be exposed to the world. And the bottom line is that Obama got it wrong, again - American Thinker, Pamela Geller
• Hands Off Honduras! - RealClearPolitics, Pat Buchanan
• Colin Powell, one of President Obama’s most prominent Republican supporters, expressed concern Friday that the president’s ambitious blitz of costly initiatives may be enlarging the size of government and the federal debt too much - Washington Times, Jon Ward
• Mexico has overtaken Canada in production of GM vehicles, making such popular name plates as the Chevy Silverado and Suburban. Last year GM made a total of 504,858 vehicles at four assembly plants in Mexico; that’s 9% higher than the 463,869 cars and light trucks produced by GM Canada. Why has Canada contributed $9.5 billion to the rescue of GM’s operations north of the 49th parallel - a figure that works out to an unprecedented $2.1 million for each of 4,400 assembly job it hopes to save - while Mexico has sailed free? - Time, Erik Heinrich

• Investors pulled $37 billion from money-market funds in the week ending July 1 and put cash into emerging-market equity funds, U.S. stock funds and high-yield bond funds, EPFR Global said - Bloomberg
• Developing countries’ share of worldwide equity value climbed to a record as the fastest- growing economies lured investors amid the first global recession since World War II. The 22 nations classified as “emerging” by index provider MSCI Inc. comprise 24 percent of world market capitalization, up from 18 percent at the start of this year, the highest proportion since Bloomberg began compiling the data in 2003. China shares surpassed $3 trillion yesterday for the first time since August, from $1.8 trillion at the end of 2008 - Bloomberg
• Asian banking shares have been at the forefront of a stock market rally over the past three months, as credit market conditions stabilized. But there is a high risk that their future earnings may be impacted by an increase in bad loans, one analyst warns - MarketWatch, V. Phani Kumar
• Oil traded below $67 a barrel on Friday, adding to a fall of nearly 4 percent the previous day, as unemployment data hardened views economic weakness would sap energy demand further and that last month’s rally was overdone - Reuters
• Most stocks fell in Europe and Asia, extending the MSCI World Index’s longest weekly losing streak since March, as reports on retail sales and the service industry added to concern the first global recession since World War II will persist. U.S. markets were closed for the July 4 holiday - Bloomberg
• Six banks in Illinois and one in Texas were seized by regulators as the deepening financial crisis pushed the toll of failed U.S. lenders this year to 52, the most since 1992 - Bloomberg
• FDIC Bank Failures by Week - Calculated Risk
• Deposed Honduran President Manuel Zelaya said he’s plotting his return to the Central American nation and called for “strong” action from the U.S. to help restore him to power - Bloomberg
• U.S. housing prices will fall by a double-digit percentage from already beaten-down levels, resulting in an overall 40 percent plunge by the time foreclosures peak in the second half of 2010, Barclays Capital economist Michelle Meyer said - Reuters
• MarketWatch’s top stories of the week - MarketWatch
• Top Videos of the Week - CNBC
• Listen to Citigroup Analysts at Your Own Peril - Mike Shedlock
• More Idiocy From the SEC: Reinstatement of Short-Selling Restrictions - Mike Shedlock
• Sweden Cuts Deposit Rate to NEGATIVE .25% There has been a lot of ludicrous recommendations recently to combat deflation by making deposit rates negative. I did not think any central bank would be dumb enough to try it. I thought wrong - Mike Shedlock
• Australia’s economy, which has so far skirted the global recession, may stall after reports showed exports dropped to a 14-month low, bank lending fell and home- building approvals declined by the most since 2002 - Bloomberg
• Japan’s Hayashi: U.S. economy has yet to hit bottom - MarketWatch
• Americans lucky enough to still have jobs are noticing something unpleasant in their paychecks: They’re making less money…….Average weekly earnings fell about $2 in June to $611.49, the lowest in nearly a year and the first month-to-month drop since March - Houston Chronicle (AP)
• Honduras’s deposed President Manuel Zelaya is touring Central America to secure international support for his return to power, even as his country’s courts, military and Congress said they’ll arrest him if he returns - Bloomberg
• Volkswagen June Sales Rise 6%, Second Monthly Gain - Bloomberg
• New research found that more than 25% of mortgage loan defaults are strategic — that is, a quarter of homeowners who default on their mortgages are walking away from their homes even if they can afford to make their payments - MarketWatch
• Phantom Homes — Hundres of thousands of foreclosed homes are hidden from the market’s eye……The hidden inventory is composed of REOs, or “real estate owned”, properties. Hagenbuckle found that between May 2008 and May 2009, there were a total of 3,734,711 foreclosure filings, and of those total filings, 26.4%, or 985,571, were REOs, These homes are otherwise hidden from view, while the rest are listed to the public through the multiple listing service, or “MLS”, system - Forbes, Carl Gutierrez
• The Rising Mountain of Debt May Be the Next Crisis - CNBC (AP)
• >>>Achilles’ Heel……the recent rebound in stocks and commodities has very little to do with any sustainable improvement in the overall economy. Whether you like it or not, the global economy is still very weak and the recession is likely to last for at least another six months. The US economy is choking on debt, American households are deleveraging, commercial bank credit is contracting and unemployment is still climbing. More importantly, the American housing market is still extremely weak and cracks are beginning to appear in commercial real-estate - SafeHaven, Puru Saxena
• >>>What’s In Store For US - Japan Of The 90’s or Argentina of 2002? - SafeHaven, John Lee
• New Evidence on the Foreclosure Crisis — Zero money down, not subprime loans, led to the mortgage meltdown - WSJ Opinion, Stan Liebowitz

• >>>>>Banana Republic: The Honduran Ouster - Pajamas TV
• President Barack Obama is considering new curbs on U.S. oil refineries whose gas emissions pose a cancer risk to hundreds of thousands of people living near the plants, setting up a potential conflict with companies over the cost of new regulations - Bloomberg
• Job losses turn up heat on Obama. Pressure mounting from all sides as economic drag continues. A little more than a week ago, President Barack Obama said it was “pretty clear” that unemployment would exceed 10%. Unfortunately for him, he’s getting closer to being right - MarketWatch, Robert Schroeder
• The last thing consumers need: a new agency. Obama’s plan to guard against devious lenders would launch a new bureaucracy to enforce the law, but we’ve already had one for 95 years. It’s called the FTC - CNN Money (Fortune), Nina Easton
• Private equity groups would have to meet strong capital requirements and pledge to maintain long-term investments before being allowed to buy failed banks, under controversial guidelines proposed by the Federal Deposit Insurance Corp Thursday. The bank regulators who serve on the board of the FDIC openly clashed about the proposals, with some officials arguing the guidelines go too far and could scare away needed capital for troubled banks - CNBC (Reuters)
• Jobs Contract 18th Straight Month — The official unemployment rate is 9.5% and rising. However, if you start counting all the people that want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is [16.5%] - Mike Shedlock
• State Farm Fire and Casualty Company on Friday announced an average statewide rate increase of 13 percent for its Illinois homeowners insurance policyholders - Chicago Tribune, Becky Yeark
• Boeing Co., which indefinitely delayed its new 787 Dreamliner in June to reinforce the wing section, lost orders for 73 of the jets this year after Qantas Airways Ltd. dropped 15 planned purchases last week. The company has also won purchase agreements for 13 Dreamliners, bringing the total order book to 850 planes valued at $151.1 billion at the average list price, according to today’s Web site update. Boeing said 17 orders for commercial aircraft were dropped in the past week, and it gained nine new ones - Bloomberg
• The Obama administration may start its program to spur purchases of mortgage-backed securities from banks with about $20 billion in public and private money, down from as much as $100 billion when the effort was announced in March, according to two people familiar with the matter - Bloomberg

• Employers in the U.S. cut 467,000 jobs in June, the unemployment rate rose and hourly earnings stagnated, offering little evidence the Obama administration’s stimulus package is shoring up the labor market. The payroll decline was more than forecast and followed a 322,000 drop in May, according to Labor Department figures released today in Washington. The jobless rate jumped to 9.5 percent, the highest since August 1983, from 9.4 percent. Unemployment is projected to keep rising for the rest of the year - Bloomberg
• The Job Market’s Grim Picture — Unemployment flirts with an ugly truth–the possibility of hitting a new post-Depression high - Forbes, Joshua Zumbrun
• U.S. Stocks, Commodities Decline as Job Losses Top Estimates - Bloomberg
• Optimism about the economy stalls - poll. CNN/Opinion Research poll shows more people see economic conditions as poor - CNN Money, Paul Steinhauser
• >>>>>Texas Gov. Rick Perry: Running a State the Right Way - Pajamas TV [15 min video]
• >>>>>Scheuer to Beck: The only chance of saving America is … another Al Qaeda attack - Hot Air [8 min video]
• Japan’s recovery from its worst postwar recession may lose momentum as companies cut investment and job losses undermine consumer spending. The Bank of Japan’s quarterly Tankan report yesterday showed businesses plan deeper spending reductions than three months ago. Large companies estimate profit will fall 20 percent this year, almost twice the March forecast - Bloomberg
• U.S. auto sales in June again failed to reach a 10 million annual pace as General Motors Corp. and Toyota Motor Corp. fell short of analyst estimates, suggesting that the industry hasn’t started to rebound yet. The annual rate fell to 9.69 million cars and light trucks last month, from 9.9 million in May and 13.7 million in June 2008 - Bloomberg
• The financial system is crashing and action must be taken by the US government to convert debt into equity to produce a more stable environment, Nassim Taleb, author of “The Black Swan,” told CNBC Thursday. “You may have green shoots, whatever you want to call them, you may have temporary relief, but you are still in a world that’s breaking,” Taleb said on “Squawk Box.” - CNBC
• California, Illinois Fail to Meet Budget Deadline - Bloomberg
• Hyundai U.S. June sales slump 24% to 37,943 units - MarketWatch
• Graphs: Auto Sales in June - Calculated Risk
• No rebound for autos — Autos are worth watching as one sector where economic growth could resume first. But despite what others are saying, I don’t believe that it’s happening yet. Some analysts seemed to take comfort in the fact that the decrease in auto sales from June 08 to June 09 was more modest than the year-over-year decline for earlier months had been. But that’s primarily a reflection of the fact that June 08 had been a significant deterioration relative to earlier months of 08 - Econbrowser, James Hamilton
• Global Lending Drought Continues — Syndicated loan volume drops 49% for first half of year. Despite what bankers say, lending continues to contract this year in the face of the economic slowdown - Forbes, Liz Moyer
• >>>Will The Global Warming Bill Cool The Global Economy? Assessing the effects of cap-and-trade - Forbes, Nouriel Roubini
• Schwarzenegger orders third furlough day, proposes new cuts. The governor calls lawmakers’ inaction on the budget ‘inexecusable’ and orders a special emergency session of the Legislature to deal with the deficit, which he says has now swelled to $26.3 billion - LA Times, Shane Goldmacher and Michael Rothfeld
• To fix the budget, first fix the state [California] — Six simple rules for remodeling the government - LA Times, George Skelton
• >>>Mexico Under Siege — The drug war at our doorstep - LA Times
• >>>Honduran sovereignty: who has jurisdiction? Does the Honduran government have the right to enforce its own Constitution? Isn’t it a sovereign nation? - American Thinker, Burwell Stark
• The Honduran interim government defied international pressure on Wednesday and vowed there was “no chance at all” of ousted President Manuel Zelaya returning to office. World leaders from President Barack Obama to Venezuelan President Hugo Chavez have told the new rulers of the Central American country to restore Zelaya, a leftist who was toppled by the army on Sunday and sent into exile after a dispute over presidential term limits. The Organization of American States gave Honduras an ultimatum early on Wednesday to allow Zelaya back into office by this weekend or face suspension - Reuters
• Bank Fees Rise as Lenders Try to Offset Losses - NYT, Eric Dash
• The Treasury Department is expected to name as many as nine fund managers to operate the long-awaited Public-Private Investment Program (PPIP) to cleanse banks of toxic assets, a person familiar with the plan said on Wednesday - Reuters
• Condo demand in Houston, nationwide is lagging - Houston Chronicle, Nancy Sarnoff
• Rates on the 30-year fixed-rate mortgage fell this week, averaging 5.32%, a quarter of a percentage point lower than they averaged at their mid-June peak, Freddie Mac reported on Thursday - MarketWatch, Amy Hoak
• Crisis Won’t End Until Balance Sheets Get Real - Bloomberg Opinion, Jonathan Weil
• Orders for U.S.-made factory goods rose by the biggest amount in close to a year in May, climbing 1.2% on a big jump in orders for transportation equipment, the Commerce Department reported Thursday - MarketWatch, Robert Schroeder
• One sure sign that the markets may be getting ahead of themselves this summer: Wall Street banks are recommending each other’s shares again - MarketWatch, David Callaway
• NY City Apartment Sales Down Over 50% - CNBC (Reuters)
• Aircraft repair jobs sold to foreign workers, resumes not important - Mike Shedlock
• States fire shots in Internet sales tax war. A new battle is brewing between online retailers and cash-strapped states - CNN Money (Fortune), Jeff Segal
• State [California] rolls out $3.36 billion in IOUs today - San Francisco Chronicle, Carolyn Said and Nanette Asimov
• Outlook For the U.S. Dollar Darkens - Time, Adam Smith
• Demands Are Only Growing Bigger For A Shrinking Base Of Taxpayers - Investor’s Business Daily

• Gasoline futures tumbled after the U.S. government reported that stockpiles rose a third week as refiners kept rates at a six-month high and demand fell to the lowest in four weeks - Bloomberg
• The Federal Reserve should use its emergency powers to immediately limit rate increases on existing credit-card balances, U.S. Senator Charles Schumer said, to protect consumers before a law takes full effect in February. Credit-card companies are rushing to raise rates and fees “preemptively,” ahead of recently enacted consumer-protection legislation, said Schumer, a New York Democrat - Bloomberg
• Ford Motor Co. said its June U.S. sales fell 11 percent, beating estimates - Bloomberg
• Toyota June U.S. sales down 32% to 131,654 units - MarketWatch
• Chrysler June U.S. sales down 42% to 68,297 units - MarketWatch
• Daimler U.S. June sales fall 26.5% - MarketWatch
• Porsche June U.S. sales slump 66% - MarketWatch
• General Motors Corp. said its total U.S. vehicle sales fell 33.6 percent in June - Blooomberg
• New York, Los Angeles and Chicago, the three biggest U.S. cities, saw an increase in population as falling housing prices slowed growth in the Florida and California suburbs that were leaders earlier in the decade, the U.S. Census Bureau said today. “The housing bubble caused a migration bubble and it has burst,” said William Frey, a Brookings Institution demographer in Washington. “Big cities survived the housing meltdown better than most of the rest of the country.” - Bloomberg
• General Motors must complete the sale of its best assets to a new government-financed company by July 10 or risk losing its financing, a senior Treasury Department official testified in bankruptcy court on Wednesday - NYT, Michael de la Merced and Micheline Maynard
• While U.S. stocks started off a new quarter with solid first-day gains, market analysts pointed to an uncertain economic climate in couching their predictions for how the market will perform for the remainder of what’s already been a tumultuous year - MarketWatch, Kate Gibson
• The Obama administration is widening its mortgage refinancing program to allow more borrowers hit hard by falling home prices to take part. Borrowers whose loans are now worth up to 125% of their home’s value are now eligible to refinance their homes under the Obama foreclosure prevention plan announced in February. Previously, the limit was 105% - CNN Money, Tami Luhby
• McClatchy Needs Mercy — The country’s third-largest newspaper chain looks perilously close to bankruptcy - Forbes, Matthew Craft
• Voluntary and Involuntary Credit Card “Attitude Adjustments” — In the course of this recession, consumer attitudes towards spending have changed. So have banks’ attitudes towards lending. In regards to consumer spending and credit cards, some consumers have had a voluntary attitude adjustment. Others have had an attitude adjustment thrust upon them.…..By the way, this curtailing of credit, voluntarily or in voluntarily is clearly a deflationary force - Mike Shedlock
• Public Support for Sotomayor Falls After Supreme Court Reversal - Rasmussen Reports
• Too Bernanke To Fail? There is no practical solution to “too big to fail,” and no alternative to the Fed’s ability to print money to ease potentially destabilizing financial panics - WSJ Opinion, Holman W. Jenkins Jr.
• The ugly face of liberalism — Obama has sided with a thug in Honduras, a man who — for completely self-serving reasons — sought to subvert his nation’s constitution - American Thinker, Selwyn Duke
• Obama’s True Colors Shine in Honduras — Obama’s response to the Honduran military removing a dictator-wannabe from office tells us who he is - American Thinker, Kyle-Anne Shiver
• Business owners cut to the bone — Recent surveys indicate that business owners are still sacrificing staff, benefits, and personal savings to keep their doors open - CNN Money, Emily Maltby
• California officials said Wednesday they are trying to avert the federal government’s threat to seize six parks that could be closed to help reduce the state’s ballooning budget deficit. National Park Service Regional Director Jonathan Jarvis warned in a letter to Gov. Arnold Schwarzenegger that all six occupy former federal land that could revert to the U.S. government if the state fails to keep the parks open - San Francisco Chronicle (AP)

• Manufacturing in the U.S. shrank in June at the slowest pace in 10 months……The Institute for Supply Management’s factory index rose to 44.8, the highest level since August, from 42.8 in May - Bloomberg
• Spending on U.S. construction projects fell in May for the fourth time in five months……The 0.9 percent decrease was more than forecast and followed a revised 0.6 percent gain the prior month - Bloomberg
• The U.S. economy will grow for a few quarters and then contract again, said Martin Feldstein, a professor of economics at Harvard University. “I think were going to see a temporary substantial improvement,” Feldstein, the former head of the National Bureau of Economic Research and Reagan administration adviser, said today in an interview on Bloomberg Radio. “I emphasize the words temporary and substantial.” - Bloomberg
• Companies in the U.S. cut more jobs than forecast in June, according to a private report today, showing the labor market will be slow to improve - Bloomberg
• Declines of more than 20 percent in regional banks and homebuilders and the failure of transportation companies to erase their annual loss may be signs the rally in the Standard & Poor’s 500 Index is about to fizzle. Smaller lenders in the gauge have lost 23 percent since climbing to a four-month peak on May 8, while builders have tumbled 25 percent from May 4, when they reached the highest level since October - Bloomberg
• Mortgage applications in the U.S. fell last week by the most since February as refinancing slumped to the lowest level in seven months. The Mortgage Bankers Association’s index of applications to purchase a home or refinance a loan dropped 19 percent to 444.8 in the week ended June 26 from 548.2 the prior week. The group’s refinancing gauge declined 30 percent, while the index of purchases fell 4.5 percent - Bloomberg
• A House-passed bill favored by President Barack Obama to curtail global warming contains “a lot of crap” that will probably delay approval of the measure this year, Ohio Republican Senator George Voinovich said. It would take a “miracle” for the legislation to pass the Senate before United Nations climate talks in Copenhagen in December, Voinovich said. “You’ve got a bill that is 1,200 pages, and there is just a lot of crap in there,” he said - Bloomberg
• JPMorgan Chase & Co., the biggest U.S. credit-card issuer, plans to raise the minimum payment on balances to 5 percent for some customers, less than a month before new federal curbs begin to take hold. The increase from 2 percent takes effect in August, the company said in a notice customers received this month. Customers who pay less than the minimum may be charged extra fees, the bank’s Web site says - Bloomberg
• Citigroup has sharply increased interest rates on up to 15m US credit card accounts just months before curbs on such rises come into effect, in a move that could fuel political anger at the treatment of consumers by bailed-out banks - FT, Francesco Guerrera, Saskia Scholtes and Tom Braithwaite
• Alabama’s Jefferson County Cuts Jobs to Stay Solvent - Bloomberg
• U.S. securities regulators are considering changing how companies are required to disclose stock options awarded to executives, people familiar with the Securities and Exchange Commission’s thinking told Reuters on Tuesday - Reuters
• From Vermont to central California, developers are creating subdivisions around organic farms to attract buyers. If you plant it, these developers believe, they will buy - NYT
• Has G.M. Overextended Its Pension Fund? - Mary Williams Walsh
• Business gets taxed, workers get hurt. The Obama administration wants to whack companies with stiff new taxes, but the real victims are already suffering enough - CNN Money (Fortune), Geoff Colvin
• With the government changing its rules about credit cards, the card issuers are changing the terms of their agreements with consumers. But consumers aren’t changing a thing. As a result, they’re suffering through bad deals because they fear what might happen to their credit score if they try to stand up for themselves and be a smart customer - MarketWatch, Chuck Jaffe
• Goldman Sachs energy analysts issued a searing downgrade Tuesday of two of the nation’s biggest independent refiners - MarketWatch
• Thomas Hoenig, the president of the Federal Reserve Bank of Kansas City, was critical of the government’s “ad hoc” rescue efforts during the financial crisis, saying that those actions have institutionalized the concept of “too big to fail” in our economic system. ‘If the fire was started by a homeowner who ignored fire codes and smokes in bed, should the neighbors be required to rebuild the home at twice its original size at their expense?’ - MarketWatch, Greg Robb and Kate Gibson
• A big second quarter for stocks, but it was front-loaded…….most of the progress occurred in the first six weeks of the quarter. Since then, stocks overall have been treading water…….Why the stall? Many investors clearly aren’t persuaded that those economic “green shoots” of spring will amount to enough to justify pushing share prices higher. And measured from the 12-year low reached March 9, the S&P 500 is up 36% — for some investors, reinforcing the feeling that if you missed it, you missed it - LA Times, Tom Petruno
• Regulator Reviews Troubles in Municipal Bond Securities - NYT, Leslie Wayne
• Bank Woes Deepening in Europe - NYT, Landon Thomas Jr.
• Battered mortgage giant Freddie Mac received $6.1 billion in new funds from the Treasury Department to help offset its mounting liabilities, according to a regulatory filing submitted today. The Federal Housing Finance Agency, which has been operating Freddie Mac since last fall, requested the funds for Freddie Mac after the mortgage firm’s liabilities exceeded its assets by more than $6 billion, according to the filing with the Securities and Exchange Commission - Houston Chronicle (AP)
• Tentatively turning the corner — Commentary: Advisers a lot less bullish today than one month ago - MarketWatch, Mark Hulbert
• Why taxes will need to go up — Health reform can reduce the deficit, but not nearly enough to address the country’s debt problem. Higher taxes and spending cuts will be needed - CNN Money, Jeanne Sahadi
• Investment Grade Bonds Return 9.2%, Junk Returns 29%; Has the “Hard Money” Been Made? As long as the corporate bond market is healthy there is going to be a bid on equities. And in the first half of 2009, junk bonds have been running - Mike Shedlock
• Uncertainty Clouds Recovery of U.S. Investment in GM — Carmaker’s Shares Would Have to Hit A Historic High - Washington Post, Peter Whoriskey
• As many as one in five U.S. hotel loans may default through 2010 as the recession means companies are spending less on travel and perks, according to University of California economist Kenneth Rosen - Bloomberg

• Delinquency rates on the least-risky mortgages more than doubled in the first quarter from a year earlier as U.S. efforts to help homeowners failed to keep pace with job losses that pushed more borrowers toward foreclosure. Prime mortgages 60 days or more past due climbed to 2.9 percent of such loans through March 31 from 1.1 percent at the same point in 2008 - Bloomberg
• Europe flirts with deflation — Commentary: Latest stats offer a cautionary sign - MarketWatch
• It’s your patriotic duty to save! Some are worried the recession will linger if consumers continue to hunker down and stop spending. But the rising savings rate is a good thing for the long-term - CNN Money, Paul R. La Monica
• UK First Quarter GDP Drops 2.4%, Most Since 1958; US GDP Fell 5.5%. Expect to see more headlines like this, worldwide - Mike Shedlock
• Lenders modified more troubled loans during the first quarter, according to a government report released today, but a growing number of borrowers are falling behind on their payments - Washington Post, Renae Merle
• >>>Largely Useless, Even Harmful — The blunt truth is that even if we had had President Obama’s financial regulatory “reforms” in place four years ago–reforms designed to prevent another financial meltdown–we would still have experienced a horrific economic disaster. In other words, the Administration’s prescriptions deal with the symptoms–and those badly–not the underlying causes - Forbes, Steve Forbes
• Obama’s Volunteer Initiative Is Economically Bankrupt - RealClearPolitics, John Tamny
• Franken Ruled Winner of U.S. Senate Seat Giving Democrats 60-Vote Majority - Bloomberg
• The U.S. Education Department will allow student loan borrowers to reduce monthly payments based on income in a change that takes effect tomorrow. Fees and interest on new student loans will fall - Bloomberg
• Some Economies Show Signs of Less Reliance on U.S. - NYT
• >>>>>[What really happened in Honduras] Nothing so shocking about this coup - Miami Herald, Glenn Garvin
• >>>Democracy Derailed in Honduras - The Nation, Greg Grandin
• >>>North Korea launches a missile and it takes Barack Obama and the UN five days to respond. Iran holds fraudulent elections, kills protesters and it takes weeks before Barack Obama can stand up and say that he is “concerned” about the situation. Then the people of Honduras try to uphold their constitution and laws of the land from being trampled by a Chavez-wanna be … and it takes Barack Obama one day to proclaim that this was not a legal coup - Boortz, Neal Boortz

• The stock selloff accelerated Tuesday morning as a weak consumer confidence report — and falling oil prices and equities — gave investors a reason to retreat on the last day of the quarter - CNN Money
• U.S. business activity shrank less than forecast in June……The Institute for Supply Management-Chicago Inc. said today its business barometer increased to 39.9, from 34.9 the prior month - Bloomberg
• U.S. consumer confidence took an unexpectedly steep slide in June, figures released on Tuesday showed, suggesting the 18-month-long recession had yet to loosen its grip on the economy. A separate report on April house prices in major cities offered some encouraging signs that the worst of the housing slump may be over, but that was not enough to lift investors’ spirits, while another crop of economic data showed business activity in New York City and the Midwest remained weak and retail chains slogged through a rough June - Reuters
• Home prices in 20 major U.S. metropolitan areas fell in April at a slower pace than forecast……The S&P/Case-Shiller home-price index decreased 18.1 percent from a year earlier following an 18.7 percent drop in March. The measure declined 19 percent in January - Bloomberg
• AIG Discloses New Risk on Derivatives Sold to Banks……”They’re guaranteeing close to $200 billion in assets in probably the riskiest environment in our lifetimes,” said David Havens, managing director at investment bank Hexagon Securities LLC. “It’s a huge number — if there was any surprise, it’s that this hasn’t been flagged before.” - Bloomberg
• Mohamed El-Erian, chief executive officer of Pacific Investment Management Co., said the U.S. Federal Reserve is unlikely to raise interest rates. The Fed will keep rates low “for a long time,” El-Erian said - Bloomberg
• General Motors Corp. said it failed to reach an agreement with Toyota Motor Corp. on future products at a Fremont, California, joint venture and will shed the operation in bankruptcy - Bloomberg
• The British economy contracted in the first quarter by the most in more than 50 years, official figures showed Tuesday, as output in the manufacturing and construction sectors plummeted. Gross domestic product fell by 2.4 percent in the first quarter from fourth quarter of 2008 - NYT, David Jolly
• A Sermon To The Banking Industry — HSBC’s chairman warns against the continuing bonus culture and says the worst of the financial crisis may not be over - Forbes, Vidya Ram
• Pushing on a string — Commentary: The Fed can’t save the economy on its own. The Federal Reserve has done about as much as it can to resuscitate the flagging economy. The rest is in the hands of the administration and the Congress - MarketWatch, Irwin Kellner
• U.S. stocks rose, extending the best quarterly rally for the Standard & Poor’s 500 Index since 1998 - Bloomberg
• Ford Motor Co., the only major U.S. automaker that hasn’t filed for bankruptcy, said it’s boosting production as its June sales of cars and trucks will have the “lowest” decline among the industry’s biggest manufacturers - Bloomberg
• >>>Things are still bad and will remain that way - The Street, Doug Kass
• Cash-Strapped States Target The Rich — New Jersey is the latest to adopt a higher rate for millionaires - Forbes, Ashlea Ebeling and Janet Novack
• Investors can now bet for or against a recovery in the residential real estate market with new exchange-listed securities designed to mimic the movement of U.S. home prices - MarketWatch, John Spence
• Japan’s unemployment rate climbed to a five year-high in May and job prospects became the most severe on record, adding to signs the world’s second-largest economy is struggling to emerge from its worst postwar recession - Bloomberg
• Gains for Mexico’s stock market and its currency in the second half of the year hinge on reforms by the Mexican government to stave off ratings downgrades and on firm signs of a U.S. economic rebound, analysts said last week - MarketWatch, Carla Mozee
• The credit-card business is facing an economic recession and increasingly stringent regulations, but one Wall Street analyst said Monday that the industry will survive and even profit from new opportunities - MarketWatch
• >>>Green Shoots and a Grain of Salt — The key fact is that we have significant economic headwinds before us, and we should be careful to take our green shoots with a grain of salt. No piece of economic news, even a strong employment figure here or there, is likely to flip the switch that makes the problems all go away - Hussman Funds, John P. Hussman, Ph.D
• In his inaugural address, President Barack Obama called for a “new era of responsibility.” This week, that era will begin all over again for many cash-strapped states as they begin their fiscal years — without hope of more help from Washington - MarketWatch, Robert Schroeder
• Long Term Budget Projections at Unprecedented and Intolerable Levels……To say that the present course is unsustainable is putting it mildly. Spending cuts are mandatory. However, neither the Obama administration nor Congress has gotten the message. Nor has the Free Lunch Society of which Paul Krugman is the high priest - Mike Shedlock
• The pace of home loan modifications shot up during the first quarter, but so did mortgage payment delinquencies and foreclosures, U.S. bank regulators said Tuesday - CNBC (Reuters)
• Did Homeowners Cause The Great Recession? Welcome to the new feudal age - Forbes, Joel Kotkin
• Treasury Sets Wide Scope For New Consumer Agency……The proposed Consumer Financial Protection Agency aims to protect Americans from abusive practices widely employed during the recent housing and credit boom, such as deceptive and undocumented mortgage lending, poor loan disclosures, and unfair interest rate increases and “fee traps” on credit cards - CNBC (Reuters)
• General Motors, hoping for a quick exit from Chapter 11, on Tuesday will ask a bankruptcy judge to approve its plan to refashion itself as a leaner automaker owned mostly by the government. The nation’s largest automaker still faces hundreds of objections from bondholders, state officials, unions and individual retirees and shareholders, but could enjoy an easier trip through the bankruptcy process thanks to the legal trail blazed just weeks ago by rival Chrysler - CNBC
• Maintaining a monarchy is costly, as Britain found out when a newly published account revealed that Queen Elizabeth II will be out of pocket by 2012 unless the government boosts funds for the Royal household for the first time in 20 years. The total cost of keeping the monarchy increased by £1.5 million ($2.5 million) to £41.5 million pounds ($69.23 million) during the last financial year, according to royal accounts published on the UK monarchy’s official web site. The Queen had to tap the reserve fund by £6 million to supplement the cost of running the Royal household, the accounts showed - CNBC
• Detroit joblessness tops among big cities. Metro area unemployment rate hits 14.9% in May, even before General Motors’ bankruptcy is taken into account - CNN Money, Julianne Pepitone
• What Happened on the Banking Index Yesterday? - SafeHaven, Marty Chenard
• A 20-Year Bear Market? - (John Mauldin), David Galland, Casey Research
• Can Iceland Be Saved? - CNBC, Rob Cox

• Lawmakers working to overhaul the U.S. health-care system face a pressure-filled July after leaving town this week without resolving the biggest questions dividing Democrats and Republicans - Bloomberg
• The Supreme Court said Monday that state attorneys general could investigate national banks for lending discrimination and other crimes, but only with a court’s help - NYT (AP)
• The Supreme Court ruled Monday that the New York attorney general’s office can investigate whether national banks discriminated against minorities seeking mortgages - CNN Money (Reuters)
• Agency Forecasts Little Growth in Oil Demand - NYT
• General Electric, the world’s largest industrial company, has quietly become the biggest beneficiary of one of the government’s key rescue programs for banks. At the same time, GE has avoided many of the restrictions facing other financial giants getting help from the government - Washington Post, Jeff Gerth and Brady Dennis
• Moving the Stimulus Goalposts - ABC News, The Note
• Bernard Madoff was sentenced to 150 years in federal prison for masterminding the largest Ponzi scheme in history - Bloomberg
• Sotomayor Firefighter Ruling Reversed by High Court - Bloomberg
• The Supreme Court And New Haven’s Firefighters –A ruling that rebukes racial preferences and Sotomayor - Forbes, Clint Bolick
• Ford Motor Co expects its U.S. sales for June will decline by less than 20 percent, giving it a higher share of the largest auto market - Reuters
• Summer looks like a washout for some retailers - San Francisco Chronicle (AP)
• Complacency as Measured by VIX Returns to Wall Street - Mike Shedlock
• Death by Obamanomics? The president’s policies on energy, unions, and health care won’t help an ailing economy - The Weekly Standard, Irwin M. Stelzer
• China’s banks are an accident waiting to happen to every one of us. Fitch Ratings has been warning for some time that China’s lenders are wading into dangerous water - Telegraph.co.uk, Ambrose Evans-Pritchard

• U.S. stocks rose, with the Standard & Poor’s 500 Index rebounding from its first back-to-back weekly drop since March, as higher oil prices lifted energy shares and investors speculated the recession is easing - Bloomberg
• JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley are extending their dominance in underwriting equity offerings — helped by the sale of shares of financial firms, including their own - Bloomberg
• Turkey’s economy probably shrank at the fastest pace on record in the first quarter as exports slumped and consumers slowed purchases of cars and domestic appliances. Gross domestic product slumped an annual 11.9 percent, the biggest drop since the government started reporting quarterly data in 1987 - Bloomberg
• Congress is eyeing ways to make sure speculative trading helps commodity markets rather than distorting pricing signals, U.S. Agriculture Secretary Tom Vilsack said in a Reuters Television interview Monday - Reuters
• Gas prices flat across US over last 2 weeks - San Francisco Chronicle (AP)
• >>>The good news: One successful survivor of the Crash of 2008 thinks the bear-market rally has further to go. The bad news: It’s still a bear market, and it will end in devastating deflation - MarketWatch, Peter Brimelow
• Your next car can cost less if you forgo GPS, satellite radio, antilock brakes, power steering, power windows and air conditioning. You can shop for such a car at your local Studebaker, Hudson, Nash, Packard and DeSoto dealers - RealClearPolitics (Washington Post), George Will
• U.K. financial services companies may cut 13,000 jobs in the third quarter even as they expressed rising optimism for the first time in two years, Britain’s biggest business lobby group said. “Conditions still remain rough but there are signs of some improvement expected in the coming months,” - Bloomberg
• Wall Street’s largest bond-trading firms say the worst may be over for investors in Treasuries after government securities posted their biggest first-half losses in at least three decades - Bloomberg
• >>>Obama’s Energy Bill is a Recipe for Economic Destruction - SafeHaven, Gerard Jackson
• China and Brazil are working on a currency arrangement to allow exporters and importers to settle deals in their local currencies, bypassing the U.S. dollar, the countries’ central banks said on Sunday - CNBC (Reuters)
• >>>Housing in Peril as Obama Fails to Get Financing Breakthrough - Bloomberg
• European confidence in the economic outlook rose more than economists forecast in June, adding to signs that record low interest rates and stimulus measures are helping to pull the region out of a recession - Bloomberg
• U.S. property and casualty insurers, a group including American International Group Inc. and Allstate Corp., posted a record loss in the first three months of the year as investments slipped and claims exceeded premiums, an industry group said. The industry reported a $1.3 billion net loss, compared with an $8.5 billion profit in the year-earlier period - Bloomberg
• Bernanke is a Total Failure Unsuited for Role as Fed Chairman - Mike Shedlock
• Strategists who came closest to predicting the dollar’s value against the euro so far this year see it strengthening as much as 17 percent in the second half as the U.S. recovers from the recession faster than Europe - Bloomberg
• Good news on current account imbalances — Commentary: But will the improvement be sustainable? - MarketWatch, David Marsh
• Sears Holdings Corp., the largest U.S. department-store chain, will let customers who lose their jobs suspend payments and keep appliances bought with store credit cards in an effort to bolster sales in the recession - Bloomberg
• Swiss banks are shutting the accounts of Americans as the U.S. Internal Revenue Service accelerates the hunt for tax dodgers - Bloomberg
• The credit card industry will continue to provide one of the most lucrative returns of the asset classes within banks’ portfolios even after new U.S. credit card rules are put in place, analysts at Keefe, Bruyette and Woods said - Reuters
• Financial products should be treated like medicines and sold to consumers only when they are certified safe to prevent a repeat of last year’s financial meltdown, the world’s central bankers said on Monday - Reuters
• Best way to find a home loan — Mortgage shopping has never been more confusing. The secret is knowing whom to talk to, and when - CNN Money, Sarah Max
• Realty fervor takes aim at reality. The real-estate balloon has deflated, but there’s still plenty of hot air surrounding home prices. Let us now appraise industry lobbying efforts to lift valuations - MSN Money, Bill Fleckenstein
• Heavier regulation curtails deep-coal mining - Washington Times (AP)

• Deposits at the San Antonio-based bank are growing a record 20 percent this year while loans shrink for the first time since mid-2007. Business owners are “being extremely cautious,” said Evans, who is pumping depositors’ money into Treasuries and municipal bonds - Bloomberg
• For stock investors, June’s job report could be a make-or-break factor next week in determining whether the recent rally has legs or not. The monthly non-farm payrolls data will come out on Thursday, instead of the usual Friday. U.S. markets will be closed on Friday, July 3rd, for the long Fourth of July, or Independence Day, holiday weekend - Reuters
• Too many regulators will only increase costs and reduce credit opportunities for consumers, JPMorgan Chase & Co Chief Executive Jamie Dimon warned in a column he wrote in Saturday’s Wall Street Journal - Reuters
• A Unified Bank Regulator Is a Good Start — Government must recognize that credit is good and capital is mobile - WSJ Opinion, Jamie Dimon
• General Motors and the Obama administration have reached a deal for the carmaker to assume responsibility for product liability claims filed after it emerges from bankruptcy as a new company, even those claims involving vehicles made by the old company, according to documents filed in bankruptcy court late Friday - NYT, Michael J. de la Merced
• Reverse Mortgages for Home Purchases - NYT, Bob Tedeschi
• While the global recession has sent prices plummeting on airfares, hotels and cruises, it is having the opposite effect on rental cars The reason is basic supply and demand. Although demand for car rentals is down - by roughly 15 percent, according to Mr. Abrams - rental agencies have cut their fleets by even more, essentially creating their own shortage and jacking up prices - NYT, Michelle Higgins
• Why Investors Bet on Bankrupt Companies - NYT, Mark Hulbert
• F.H.A. Loans Help Sales - NYT, Elizabeth A. Harris
• Climate Change Bill May Be Election Issue — As Democrats strained to win over crucial holdouts on the way to narrow, party-line approval of global warming legislation, they were dogged by a critical question: Has the political climate changed since 1993? - NYT, Carl Hulse
• Investors who purchased exchange-traded funds tracking real estate investment trusts in hopes of diversifying their portfolio against stock-market shocks have been sorely disappointed. REITs, which let individuals invest in commercial real estate, have been thumped by the recession and tight lending markets. The companies manage specific types of properties such as shopping malls, apartments and storage facilities - MarketWatch, John Spence
• Walk before you run — Commentary: Stock funds heat up, but keep your cool. With the stock market in rally mode, a lot of mutual-fund investors will eagerly measure performance when they get their midyear paperwork - MarketWatch, Chuck Jaffe
• Personal bankruptcies surge in Southern California. The region had the nation’s biggest percentage jump in 2008, and the number this year through April is up 75% despite a 2005 rule overhaul aimed at curbing filings by those who would benefit unfairly - LA Times, David Colker
• Two new websites can help buyers save on closing costs and mortgages. Closing.com has a vendor database of nearly 150,000 firms in 14 categories, and fairmortgage.org lists dozens of lending organizations that promise to offer safe mortgages at fair prices - LA Times, Lew Sichelman
• 175 California Hotels In Default; Sheraton Keahou Bay Resort in Hawaii Defaults; More Defaults Coming. Hotel owners are facing the same problems as homeowners, being upside down on their properties with no good escape - Mike Shedlock
• Sadly, history will continue to show that those in positions of great power, elected by various means as prudential stewards of peoples and their economies, continue to prove themselves nothing more than shepherd’s of illusion - SafeHaven, Joseph Russo
• >>>I believe we are smack dab in the middle of the biggest stock bear market any of us will witness in our lifetime. This colors my views on investing tremendously and creates an inherent bias. If you don’t subscribe to the same view, my rants probably seem a little over the top. But when the P:E ratio is well over 100 during the worst housing market crash and bank and Wall Street wipeout since the last great generational bear market (i.e. the 1929-1932 bear) occurs, it’s time to take notice - SafeHaven, Adam Brochert
• New Research on Walking Away - Calculated Risk

• Nebraska and at least 37 other states formed a committee to oppose General Motors Corp.’s planned sale of assets to a company controlled by the U.S. government, according to a court filing today. The states have said they oppose GM’s use of bankruptcy law to annul contracts with unwanted auto dealers - Bloomberg
• America’s biggest oil companies will probably cope with U.S. carbon legislation by closing fuel plants, cutting capital spending and increasing imports - Bloomberg
• Rules May Limit Cash for Clunkers Program - NYT, Nick Bunkley and Sara Peters
• Overcoming deep divisions within its Democratic majority, the House passed legislation on Friday intended to address the threat of global warming and transform the way the United States produces and uses energy. The vote was 219 to 212 - NYT, John M. Broder
• Four banks fail, bringing 2009 tally to 44 - MarketWatch
• A key accounting rules regulator on Friday raised concerns about congressional pressure exerted on the Financial Accounting Standards Board as it considered changes to audit rules for mortgage-backed securities - MarketWatch, Ronald D. Orol
• Five Fatal Flaws of Trading — Close to ninety percent of all traders lose money. The remaining ten percent somehow manage to either break even or even turn a profit - and more importantly, do it consistently. How do they do that? - SafeHaven, Jeffrey Kennedy
• Treasuries rose, with 10-year note yields falling the most since March, after the Federal Reserve said it would keep rates near zero through the rest of the year and reports showed a jump in jobless claims and tame inflation - Bloomberg
• President Barack Obama said climate- change legislation passed by the U.S. House yesterday would help transform the nation’s economy and create millions of new jobs in alternative energy industries - Bloomberg
• China’s planning agency is likely to reject a Chinese company’s bid to acquire General Motors’ Hummer unit, in part because its gas-guzzling vehicles conflict with Beijing’s conservation goals, state radio reported - Houston Chronicle (AP)
• The Securities and Exchange Commission on Wednesday will consider proposing a rule giving shareholders a vote on executive compensation of banks receiving funds from the bank-bailout program, according to an agency release - MarketWatch, Ronald D. Orol
• Winners and losers emerge in climate bill — In addition to raising energy prices, the climate legislation that’s winding through Congress would create a parallel financial system with a carbon-based currency - San Francisco Chronicle (AP)
• >>>Is it time for underwater homeowners to be given a get-out-of-debt-free card? Some housing experts believe there is no alternative but outright forgiveness of a substantial chunk of mortgage debt for many people who are at risk of foreclosure - LA Times, Tom Petruno
• Embrace Deflation - It’s The Cure, Not The Problem - Mike Shedlock
• Oil Markets Stay Calm Despite Political Unrest in Iran - Washington Post, Steven Mufson
• In the midst of the longest, and probably deepest, postwar recession last year, the U.S. investment position with the rest of the world sharply deteriorated. At the end of 2008, America’s net international investment position was minus $3.47 trillion, the Commerce Department reported Friday. That represents the difference between the value of U.S. assets owned by foreigners ($23.36 trillion) and the value of foreign assets owned by Americans ($19.89 trillion). At the end of 2007, the U.S. net international investment position was minus $2.14 trillion. Thus, America’s net indebtedness with the rest of the world increased by $1.33 trillion, or 62 percent, during 2008. It was by far the biggest annual increase in data that go back to 1976. Foreigners now hold nearly 50 percent of the federal government’s publicly held debt. If foreign investors significantly reduce their purchase of future U.S. Treasury debt securities, without even dumping their current holdings, U.S. interest rates could soar and the dollar could collapse, analysts fear - Washington Times, David M. Dickson

• House to Begin Final Climate-Change Debate Under Heavy Lobbying - Bloomberg
• Are banks now in write-up territory? New accounting rules give banks more leeway in how to price their assets, but estimates may be a bit sketchy - CNN Money (Fortune), Anthony Currie
• >>>>>Obama, the African Colonial — Had Americans been able to stop obsessing over the color of Barack Obama’s skin and instead paid more attention to his cultural identity, maybe he would not be in the White House today. The key to understanding him lies with his identification with his father, and his adoption of a cultural and political mindset rooted in postcolonial Africa - American Thinker, L.E. Ikenga
• The U.S. banking industry said it made $9.8 billion during the first quarter trading derivatives and securities - Bloomberg
• Good news, bad news on derivatives — U.S. banks’ exposure to potential derivatives losses drops 10% in the first quarter - but remains a scary-looking $1.42 trillion - CNN Money (Fortune), Colin Barr
• The ratings on $235.2 billion in debt backed by commercial mortgages may be cut by Standard & Poor’s as the ratings company seeks to reflect how the securities would fare in an “extreme economic downturn.” The possible reductions, disclosed today in a report, follow S&P’s May 26 statement that the ratings of as much as 90 percent of top-ranked commercial mortgage-backed bonds sold in 2007 may be cut because of the changes in how they’re assessed. If the securities backed by hotels, shopping centers and offices lose their top-ranked status, they’ll be excluded from the Federal Reserve’s $1 trillion Term Asset-Backed Securities Loan Facility, a setback for the government’s efforts to jumpstart lending - Bloomberg
• Five Reasons Housing Market Still Hasn’t Recovered Yet - CNBC, Jeff Cox
• Double Whammy [Health care and Cap 'n Trade] - SafeHaven, Peter Schiff
• Medicine Will Follow Mortgages - SafeHaven, Daniel Aaronson and Lee Markowitz
• Bernanke Flubs Tryout……Somewhere in the West Wing, Larry Summers is smiling - Bloomberg

• U.S. personal incomes jumped 1.4% in May due to one-time stimulus checks, sending the savings rate to a 15-year high, the Commerce Department reported Friday - MarketWatch, Rex Nutting
• U.S. Savings Rate at Highest Point in 15 Years — Tax cuts from the stimulus package and increases on Social Security checks lifted personal incomes sharply in May, the government reported on Friday, but it appears that many people are putting that money away instead of spending it - NYT, Jack Healy
• U.S. stocks and the dollar dropped after China’s central bank reiterated a call for a “super sovereign currency,” - Bloomberg
• Confidence among U.S. consumers rose this month for a fourth straight time, reflecting signs that the worst of the recession has passed. The Reuters/University of Michigan final index of consumer sentiment gained to 70.8, the highest level since February 2008, from 68.7 in May - Bloomberg
• California’s general-obligation credit rating was cut by Fitch Ratings as state officials struggle to close a $24 billion deficit, Fitch said in a release today. Fitch cut the rating one level, to A- from A. The new grade is four steps away from high-risk, high-yield junk-bond status and is the seventh-highest of 10 investment grades. Fitch, which put the bonds on a negative watch, expects the state’s finances to “continue to be strained” through fiscal year beginning July 1 as revenue declines - Bloomberg
• Yields on Fannie Mae and Freddie Mac mortgage securities declined to the lowest in more than three weeks, signaling that interest rates on new home loans will likewise fall and ease the U.S. housing slump. Yields on Washington-based Fannie Mae’s current-coupon 30- year fixed-rate mortgage bonds tumbled 0.15 percentage point to 4.56 percent as of 2:55 p.m. in New York, the lowest since June 3 - Bloomberg
• Japan’s consumer prices fell at a record pace in May, adding to signs that a return to deflation may hamper a rebound from the nation’s worst postwar recession - Bloomberg
• The Challenge of Regulating Derivatives — In the world of derivatives, profits for the dealers come from complexity and secrecy. As a new regulatory system for derivatives is shaped on Capitol Hill, the banks will try to preserve as much of both as they can. To the extent they succeed, it will be the customers, and the financial system, that are at risk - NYT, Floyd Norris
• Bear Market Could Last To 2020 - CNBC, Lee Brodie
• Qantas Airways Ltd., the biggest customer of Boeing Co.’s 787 Dreamliner, cancelled or delayed orders for 30 planes amid slumping international travel demand - Bloomberg
• The cost of borrowing in dollars for three months in London dropped below 0.6 percent for the first time as central banks offered cash to financial institutions and signaled interest rates will stay at record lows. The London interbank offered rate, or Libor, that banks charge for three-month loans fell half a basis point to 0.598 percent today - Bloomberg
• Chairman Ben S. Bernanke’s grilling by legislators over Federal Reserve conduct in Bank of America Corp.’s takeover of Merrill Lynch & Co. may reduce the odds the central bank will win new powers in a regulatory overhaul - Bloomberg
• Two of the nation’s biggest coal-burning utilities said Thursday that they were withdrawing from a $2.4 billion project to demonstrate carbon capture and storage, and would instead pursue their own work in the field - NYT, Matthew L. Wald
• Cost of rescues: $835 billion this year. Congressional Budget Office estimates 2009 outlays to stem economic and financial crises. But the bigger problem for the budget looms elsewhere - CNN Money, Jeanne Sahadi
• Fifteen states have depleted their unemployment insurance funds so far, forcing them to borrow from the U.S. Treasury. A record 30 of the country’s 50 states are expected to have to borrow up to $17 billion by next year - CNBC (Reuters)
• Did Clinton cause the banking crisis? A trio of regulatory changes and missteps on the former president’s watch let the banks run wild and encouraged the housing bubble. But he had help, of course - MSN Money (MarketWatch), David Weidner
• Why Isn’t The Stimulus Stimulating? We need to implement plans quickly for positive economic growth - Forbes, Bruce Bartlett
• The Other Shoe in Real Estate — The collapse in prices has finally come to your neighborhood, too, Mr. Comfortable - Forbes, Stephane Fitch and Matthew Woolsey
• >>>Bernanke Suffers From Selective Memory Loss; Paulson Calls Bank of America “Turd in the Punchbowl”; How Did a Private Deal Turn Into a Federal Bailout?; Let the Criminal Indictments Begin: Paulson, Bernanke, Lewis; The Fed is largely to blame for the housing/credit bubble by holding interest rates too low, too long. The way to control risk is to get rid of the Fed and its micro-mismanagement of interest rates, not to extend the Fed’s power - Mike Shedlock
• Close Win Predicted For Cap-and-Trade Bill - House Speaker Reports ‘Progress’ - Washington Post, Paul Kane, Ben Pershing and David A. Fahrenthold
• Agreement Reportedly Near on Health Bill — Senators Report Reducing Overall Cost but Not Resolving Issue of ‘Public Option’ - Washington Post, Shailagh Murray and Lori Montgomery

• U.S. stocks advanced for a third day as the Federal Reserve curtailed its intervention into financial markets, better-than-estimated earnings at Bed Bath & Beyond Inc. lifted retailers and Lennar Corp. triggered gains by homebuilders - Bloomberg
• The Cap and Tax Fiction — Democrats off-loading economics to pass climate change bill - WSJ Opinion
• The Federal Reserve will let one of its emergency programs expire and trim two others in a sign that improving financial markets allow a first step toward ending its unprecedented interventions - Bloomberg
• Builders Will Keep Getting ‘Squeezed’ for Months — Builders in the U.S., battling their lowest market share on record, will need to keep cutting prices and offering upgrades to attract buyers as competition from foreclosures mounts - Bloomberg
• Bank of America Heads for Quarterly Loss, Citi Says - Bloomberg
• LeFrak: Lenders Must Keep More Skin In The Game - CNBC, Christina Cheddar Berk
• >>>House Judiciary Committee Chairman John Conyers Jr. has backed off his plan to investigate wrongdoing by the liberal activist group ACORN, saying “powers that be” put the kibosh on the idea - Washington Times, S.A.Miller
• General Motors Corp., rushing to emerge from bankruptcy as a profitable automaker, can’t keep up with demand for the 2010 Chevrolet Camaro sports car - Bloomberg [Sports car???]
• Now that the company is out of bankruptcy, Chrysler dealers face a new hurdle: GMAC, which provides dealers with credit, views some Chrysler dealers as too risky to continue funding - Washington Post, Kendra Marr
• Salaried retirees of General Motors Corp. lost a bid have their own official committee in the automaker’s bankruptcy case. The group, which represents about 122,000 salaried GM retirees and their dependents, said there needed to be an official committee to negotiate with GM over pension and health care benefits. U.S. Bankruptcy Judge Robert Gerber in Manhattan disagreed, ruling today that GM had the right to alter the plans at any time and that prior court decisions required him to reject their request - Bloomberg
• The median price for an existing, single-family detached home in California declined 30 percent to $267,570, the California Association of Realtors said today in a statement. In the Las Vegas area, the median price for houses and condominiums fell 44 percent to $135,000 - Bloomberg
• Home builders are reporting more quarterly losses this week and the latest new-home sales numbers were disappointing, and the industry is bracing for additional pressure from rising foreclosures and waves of adjustable-rate mortgages resetting higher - MarketWatch, John Spence
• California may run out of money by the end of July, but it will start issuing IOU’s a week from today. State Controller John Chiang says he will be forced to issue the “registered warrants-also known as IOUs” starting July 2 unless an immediate budget solution is passed quickly. Chiang issued IOUs during the last fiscal crisis back in February, but he says the shortfall this time is five times greater, and the governor has shut off going to Wall Street “to pursue short-term, high cost loans.” - CNBC, Jane Wells

• The number of Americans filing claims for unemployment benefits unexpectedly rose last week……Initial jobless claims rose by 15,000 to 627,000 in the week ended June 20, from a revised 612,000 the week before - Bloomberg
• The economy tumbled at a 5.5 percent pace in the first quarter, but appears to be doing better now. The revised reading on gross domestic product, released today by the Commerce Department, showed the economy from January through March didn’t fall as deeply as the 5.7 percent annualized decline reported a month ago - LA Times (AP)
• Signs of distress are showing up in the 200-day moving average, one of the most widely watched technical indicators used to track stocks, giving investors on the sidelines one more reason to hold their cash tight - MarketWatch, Laura Mandaro
• How Congress Will Steal the Recovery — That rebound you are counting on in corporate profits? Washington is going to tax, mandate and regulate it away - Forbes, Janet Novack and Brian Wingfield
• Health Tax to Cover More Americans May Cut Benefits - Bloomberg
• Home-Price Recovery May Be Undermined by Appraisals — Flawed appraisals are derailing real estate sales and depressing values across the U.S., the National Association of Realtors said yesterday - Bloomberg
• U.S. to soon launch bank toxic asset plan: Treasury - Reuters
• Regulatory Reform: A Primer — An analysis of the U.S., the E.U. and Switzerland - Forbes, Nouriel Roubini and Elisa Parisi-Capone
• Russia Facing Long Recession, World Bank Says - NYT, Andrew E. Kramer
• Credit-card companies are taking a double beating from rising defaults and tighter federal regulation but it is consumers who will likely feel the pain in the coming months - MarketWatch, Ruth Mantell
• More signs that the US economy is making a slow recovery are fueling worries that a market correction is in the works. The Federal Reserve’s decision Wednesday to keep interest rates low because of the weak economy took the air out of a stock market rally and heightened concerns that some of Fed Chairman Ben Bernanke’s “green shoots” were turning brown - CNBC, Jeff Cox
• California air regulators on Thursday will consider leveling the nation’s first statewide carbon fee on utilities, oil refineries and other industries as a way to pay for the state’s landmark greenhouse gas emissions law. The move comes at a time of rising unemployment and great economic uncertainty in the nation’s most populous state, prompting concerns that the regulatory fee will impose yet another burden on California’s struggling business climate - San Francisco Chronicle (AP)
• A warning bell on California’s debt — As sure as the sun will set on the Golden State, analyst Martin Weiss says California is going to default. Known for his early warnings on Bear Stearns and Lehman Brothers, analyst Martin Weiss of Weiss Research is now sounding the alarm about state of California municipal bonds. In a new report, Weiss has some rather blunt advice for California muni investors: “Sell all California paper now!” His reasoning? California is facing a $24 billion budget gap with no obvious way to close it - CNN Money (Fortune), Jon Birger
• Budget mess takes rising toll on state’s muni bond market……Yields on muni bonds nationwide generally are up from a month ago, but not like the surge in California issues. When the state goes to borrow again, it will pay painful prices for money……Not surprisingly, the state’s mess also is making buyers scarcer for bonds of some smaller California cities and other municipalities that stand to be hurt by Sacramento’s budget-slashing - LA Times, Tom Petruno
• Short Selling of S&P 500 Increases for First Time Since March - Bloomberg
• Record credit card losses are pushing big US banks to come to the rescue of off-balance sheet vehicles they use to transform hundreds of billions of dollars in consumer loans into securities sold to investors. Most credit card loans are placed into pools - structured as trusts - that are used to back bonds sold to investors. Banks rely on such “securitisations” to fund their huge levels of credit card lending while keeping most of the risk off their books - FT, Saskia Scholtes and Francesco Guerrera
• >>>Fed tries to turn conversation away from deflation risk……One of the greatest fears since the economy and financial markets plunged off a cliff last fall was that the U.S., and maybe the world, would fall into a deflationary cycle — a vicious spiral of falling prices and falling wages. Deflation feeds on itself by encouraging consumers to put off purchases, figuring things will only get cheaper (which, of course, is what happened with housing)…….But some economists say it’s premature to think deflation is no longer a serious risk - LA Times, Tom Petruno
• Louis Gerstner, the former International Business Machines Corp. chief executive officer, said that short-term investment gains should be taxed at 80 percent as a way to counter the culture of greed on Wall Street. “If you buy something — a stock or a bond — in the morning, and you sell in the afternoon, the tax probably ought to be 80 percent,” - Bloomberg
• Volcker Gets Less Than He Wants in Curbing Wall Street Excesses……He was stuck at the White House gate, trying to convince guards that he was expected for dinner. His plane from New York had been delayed by a storm, and his security clearance to enter the building that day had expired - Bloomberg
• If you think the new “Cash for Clunkers” law is going to help you buy a new car, you’re probably wrong. As it’s written, the law will benefit few car shoppers and those who might actually benefit from it probably shouldn’t be buying a new car to begin with - CNN Money, Peter Valdes-Dapena
• Investor Jim Rogers said on Thursday that he sees prolonged economic problems and while he did not see much worth buying, he is not shorting any assets either. He repeated a previous comment that he is selling his U.S. dollars and that commodities were the best investment bet - CNBC (Reuters)
• Dr. Seuss On The Economy - Mike Shedlock
• A Recession in Dog Years — The U.S. is experiencing what Japan did in the 1990s, but seven times faster - Newsweek, Daniel Gross
• Trojan Hearse - ‘Cap and Trade’ = Economy-Killer - New York Post, Myron Ebell

• The Federal Reserve refrained from increasing its $1.75 trillion bond-purchase program, said the pace of economic contraction is slowing and predicted inflation will remain “subdued for some time.” - Bloomberg
• Fed Board Maintains the Status Quo - NYT, Edmund L. Andrews
• Fed breathes a huge sigh of relief — Commentary: Deflation fades as risk, but no sign of rate hikes yet. Top U.S. monetary-policy makers at the Federal Reserve breathed a big sigh of relief: The second coming of the Great Depression has been averted - MarketWatch, Rex Nutting
• Text of FOMC statement - MarketWatch
• Treasury notes pared losses after stronger-than-forecast demand at a U.S. auction of $37 billion in five-year notes and as the Federal Reserve was forecast to keep interest rates steady at today’s policy meeting. The auction, the second of three this week for a record $104 billion, drew a yield of 2.70 percent, lower than forecast, and the most demand from a group of investors that includes foreign central banks since 2004 - Bloomberg
• >>>Warren Buffett to CNBC: U.S. Economy In “Shambles” .. No Signs of Recovery Yet - CNBC, Alex Crippen [with 14+ minute video]
• Citigroup Inc., the U.S. bank that got $45 billion of government funds, will raise base salaries by as much as 50 percent to help compensate for a reduction in annual bonuses, a person familiar with the plan said - Bloomberg
• The Federal Reserve sought to hide its extensive involvement and concerns about Bank of America’s acquisition of Merrill Lynch amid the latter’s worsening financial condition, a top Republican congressman said on Wednesday - CNBC
• With signs the economy is improving but still fragile, Federal Reserve policymakers are considering whether some programs intended to drive down rates on mortgages and other consumer debt should be slowed down. Most economists predict that Fed Chairman Ben Bernanke and his colleagues, who resumed meeting today morning, won’t launch any bold new efforts at the end of their two-day gathering. Fears have grown on Wall Street that the Fed’s radical efforts to lift the country out of the longest recession since World War II could ignite inflation later on - Houston Chronicle (AP)
• Allison: U.S. financial system remains vulnerable — Roughly $200 billion in TARP funds are injected into 633 financial institutions - MarketWatch, Ronald D. Orol
• The U.S. government has waded into a case that could determine the future of mutual-fund fees, and told the Supreme Court that it believes a lower court went too far in restricting investors’ ability to successfully sue their funds for charging too much - MarketWatch, Sam Mamudi
• State shutdowns loom as deadlines near — At least 19 states still have to approve their fiscal 2010 budgets before next Tuesday. If they don’t, staffers might not be paid and services might shut down - CNN Money, Tami Luhby
• IBM draws antitrust critics, who see new opportunity — Microsoft-backed firm presses antitrust case; ‘cloud computing’ could be boon - MarketWatch, John Letzing
• New High For U.S. Charge-Offs — The rate of uncollectible loans hit 10.6% in May, a record figure for Moody’s Credit Card Index - Forbes, Matthew Craft
• Long Term Buy And Hold Is Still Bad Advice. In spite of what you hear from main stream media and self-serving advice from Wall Street, an investment philosophy of long term buy and hold is not what it’s cracked up to be. Unfortunately, many boomers headed into retirement are finding that out now, at the worst possible time. Moreover, looking ahead, I doubt the next decade is not going to be much better than the last - Mike Shedlock
• Credit-Card Companies: Who Qualifies Now? After years of getting Americans hooked on credit, card companies are slashing limits and weaning themselves off all but the safest customers - BusinessWeek, Prashant Gopal