Today's Headlines

Bloomberg:
- Hedge Funds Foment Russia Credit Crunch With 16% Puts.
- Amazon.com(AMZN), the world’s largest online retailer, will introduce a paid video-streaming service within the next few weeks.
- US stocks, which began the year with their biggest quarterly drop since 2002, may be poised to rally now that credit markets have returned to normal since mid-March, Bear Stearns said.
- The Markit CDX North America Investment Grade Index of 125 companies in the US and Canada declined 5.5 basis points to 101.5 basis points as of this morning.
- Credit-Default Swaps Enter ‘Mainstream,’ Bank of America Says.
- Dennis Gartman, economist and editor of the Gartman Letter, Says Oil Market ‘Fearful’ Over Trading Rules. (video)
- Copper fell to a two-month low as inventories of the metal climbed and the dollar rallied. Supplies of copper have increased 14% just this month.
- Crude oil rose more than $2 a barrel after Morgan Stanley said that Brent oil from the North Sea could “easily” reach $150 a barrel, thus boosting investment fund speculation in the commodity.
- Treasuries fell, pushing the 10-year note’s yield above 4% for the first time since January, as a measure of durable goods orders unexpectedly rose.
- Expedia(EXPE) Rises on Speculation Diller May Take Company Private.
- Polo Ralph Lauren(RL) rose the most in almost two years in NY trading after reporting an unexpected increase in profit.
- American Eagle Outfitters(AEO) rose the most in four months in NY after forecasting second-quarter profit that exceeds some analysts’ estimates.
- As the Olympics countdown clock in Tiananmen Square ticked down to 73 days yesterday, the pollution reading in Beijing climbed to “hazardous.”

Wall Street Journal:
- SEC Will Scour Bear Trading Data. Bear Stearns(BSC) plans to turn over documents to securities regulators showing that several financial giants, including Goldman Sachs(GS), Citadel Investment Group and Paulson & Co., slashed their exposure to the securities firm in the weeks before its collapse. The SEC is expected to use the data to determine whether any trading activity was improperly coordinated in any way, constituted manipulation or otherwise contributed to Bear Stearns’s collapse. The SEC has delved more deeply into the ties among hedge funds, their clients and their prime brokers with a particular focus on flows of information and potential insider trading.
- Soaring cocoa prices are driving up the cost of chocolate around the world. The chocolate industry points its finger at speculative buying by professional investors, especially hedge funds. Given the small size of the cocoa market – the annual crop is valued at $10 billion, roughly equity to a day’s oil production – hedge funds can move prices with relatively small amounts of cash. For the week ended May 13, financial speculators on the Intercontinental Exchange owned futures contracts over 654,760 metric tons of cocoa. The Swiss maker of Lindt chocolates says speculative investment is distorting the cocoa market. “The increase in cocoa prices has little to do with supply and demand,” CEO Ernst Tanner said.

NY Times:
- Coors Light Expands Advertising on Facebook, MySpace.
- TiVo Will Start Service to Deliver TV Critic’s Picks.

Senate Committee on HSGA:
- Testimony of hedge fund manager Michael Masters, before the Senate Committee on Homeland Security and Governmental Affairs, on the role that speculation has played in recent commodity price movements.

CNNMoney.com:
- Recession? Maybe. Depression? Get Real. Some people think that the economy isn’t in recession and that journalists are just spreading doom and gloom for various self-serving reasons. Take your pick among the following: We’re trying to get Obama in the White House. We’re helping our numerous short-seller friends. Scary headlines generate more reader interest and hence, advertising dollars.

Washington Post:
- Rx for Global Poverty is Growth.

Morningstar:
- US federal lawmakers think they may have found a way to pop what’s possibly an energy market bubble. If they have, proposed regulations targeting speculation limits could prick one of the most dramatic run-ups in crude-oil prices in history. By targeting two loopholes, US legislators from both parties hope to limit the amount of buying by purely financial players such as hedge funds and investment banks – effectively cutting billions of dollars in additional demand in commodity markets – and to bring prices closer to earth.

Forbes:
- Hedge Fund Administrators Report $2.759 Trillion in Hedge Fund Assets in Q1 2008.

AP:
- Democratic Party lawyers says that the rules committee could potentially seat some, not all, of the delegates from Michigan and Florida. Democratic presidential candidate Hillary Clinton wants all delegates seated from Michigan and Florida. One option lawyers outlined could restore all delegates if the Credentials Committee decides to recommend that. If so, a final decision wouldn’t be made until the first day of the party’s convention in August.

BBC:
- UK Prime Minister Gordon Brown and Chancellor of the Exchequer Alistair Darling will meet with oil industry leaders in Scotland to discuss soaring fuel prices. Brown, who is under pressure from protesting truck drivers to lower road and fuel taxes, will ask oil company representatives what help they would need from the government to increase production, such as investment in new infrastructure or oil exploration.