Today's Headlines

Bloomberg:
- Yields over benchmark rates on securities backed by credit card and auto loan payments narrowed this month in a sign that demand is returning for debt tied to consumer payments, according to Merrill Lynch(MER).
- Vietnam’s dong weakened, completing a fourth weekly loss, on speculation accelerating inflation and a widening trade deficit will increase the demand for US dollars. “Demand for US dollars is very high at the moment, particularly after the inflation and trade deficit reports,” said Bui Thi Kim Oanh, who manages a Vietnam equity fund.
- Global grain stockpiles will be 1.6 percent higher than previously forecast, led by gains in wheat production, the International Grains Council said.
- Canada’s economy unexpectedly shrank in the first quarter, the first drop in almost five years, dragged down by lower automobile exports, giving the Bank of Canada more reason to cut borrowing costs again next month.
- India’s economic growth held at the weakest pace since 2005 as the highest interest rates in six years discouraged consumer spending and investment.
- The US dollar was headed for a second straight monthly gain against the yen and euro as gains in stocks signaled traders are more optimistic the economy will improve.

NY Times:
- NY Governor Paterson Focuses on Gay, Lesbian Rights.

Washington Post:
- CIA Director Michael Hayden said the terrorist network al-Qaeda is essentially defeated in Iraq and Saudi Arabia and on the run in the rest of the world. Hayden said Osama bin Laden is losing the battle for hearts and minds in the Islamic world and has lost the ability to exploit the Iraq war to win new recruits. “The ability to kill and capture key members of al-Qaeda continues, and keeps them off balance – even in their best safe haven along the Afghanistan-Pakistan border,” Hayden said. Those comments are a marked positive change from a CIA assessment from two years ago.

USA Today:
- Hurricane high-risk areas have lost residents.

Reuters:
- Oil bubble could prove threat to pension funds. Pension funds and other investors who rushed into oil through commodity indexes this year chasing big returns as other assets classes tanked could face steep losses if prices fall from record highs. A sell-off in oil could spell big losses for the pension funds, municipal funds, college funds, unions and other groups that jumped out of equities-market plays and into the indexes, but have little experience or flexibility to deal with fundamental changes in commodities. “A lot of the accounts that have moved into commodities over the last 8-12 months clearly don’t belong in this forum,” said Peter Beutel, president of Cameron Hanover. “It means that when this market turns, these people are going to get hurt badly, and there will be tons of lawsuits because they have no understanding how quickly commodities markets can turn and leave them in the dust,” he explained. Analysts said that while speculators such as hedge funds, which can be long or short markets, are frequently blamed for driving up prices, it may actually be pension and college funds investing money for average citizens that are helping cause fuel and food riots around the globe.

Financial Times:
- On Wall St: Hedge funds take ‘plain vanilla’ approach. With the average hedge fund in the $2,500bn global industry posting negative returns so far this year, investors must start to question just what they are paying for when they hand over their hefty fees to managers.

Daily Telegraph:
- Asian countries begin to burst the oil bubble. One by one, countries across Asia and the Middle East are being forced to abandon price controls on fuel and energy, bring hundreds of millions of consumers face to face with the true market cost of oil. Egypt has raised prices 40%, Indonesia by 33%, Taiwan by 20% and Sri Lanka raised diesel/petrol prices by 25%. India may follow soon. “The situation is alarming. We need to stem the rot,” said India’s energy secretary. While China has so far resisted calls for price freedom, analysts predict a change in tack after the finish of the Beijing Olympics.
- Electric cars: The next big thing.

Dagens Industri:
- Scania AB and Ericsson AB are among Swedish companies meeting the Iraqi government in Stockholm today to discuss investments and business opportunities in the country. Iraq holds great potential, and the country used to be truckmaker Scania’s biggest export market in the early 1980s, citing a Scania spokesman.

Al-Rai:
- Iraq may resume crude oil exports to Jordan at discounted prices, citing Iraqi Vice President Tariq al-Hashemi. Supplies by truck were halted in 2003 after the US-led liberation of Iraq.