Today's Headlines

Bloomberg:
- Record bets against U.S. stocks may mean the market is on the verge of a rebound fueled by purchases of shares that were sold short, according to JPMorgan Chase & Co.(JPM). So-called short interest on the New York Stock Exchange has risen 55 percent this year to a record 3.6 percent of listed shares, JPMorgan Chief Equity Strategist Thomas J. Lee wrote in a report today. A record 36 percent of the companies in the S&P 500 have at least 5 percent of their shares sold short, the report said. Eighteen percent have more than 10 percent of their shares shorted. The 55 percent jump in short interest since October exceeds all other gains since 2000, the report said. The six previous increases averaged 28 percent and lasted 11 months, Lee wrote. During those periods, the S&P 500 declined an average of 6 percent. The benchmark U.S. stock index gained an average of 8 percent in the six periods since 2000 when short interest declined, according to the report. The typical rally to cover bets reduced short interest by 12 percent. A drop in current short interest by that amount would lower the figure by 2.4 billion shares, worth about $70 billion, Lee said.
- Broadcom Corp.(BRCM) the maker of chips for cell phones, climbed the most in two weeks in New York trading after Piper Jaffray Cos. upgraded the stock to ``buy'' and said second-quarter revenue may exceed estimates.
- Juniper Networks Inc.(JNPR) rose the most in almost five months in Nasdaq trading after a Piper Jaffray Cos. analyst said new products will help the maker of networking equipment meet revenue goals.
- The German economy, Europe’s largest, will probably grow about .3% in the third quarter following a contraction of .6% in the second, the Handelsblatt-Barclays indicator showed.
- NYSE Euronext’s Liffe derivatives market will offer to guarantee credit-default swaps traded outside of exchanges, as the industry responds to demands from regulators to reduce the risk of market failure.
- Freddie Mac(FRE) and Fannie Mae(FNM) plunged in New York Stock Exchange composite trading on concern the two largest mortgage-finance companies may need to raise more capital.
- Commodities plunged the most since March, led by tumbling grain futures, as favorable Midwest weather improved prospects for U.S. crops. Energy prices also dropped.
- Goldman Sachs Group Inc.(GS), the securities firm that generates more trading revenue than any of its U.S. rivals, lost money on 20 days last quarter, more than the prior period, as the value of credit products fell.
- Federal Reserve Bank of San Francisco President Janet Yellen said the central bank shouldn't allow any increase in wages and prices to fuel inflationary pressures as sluggish U.S. economic growth quickens next year.
- Microsoft Corp.(MSFT) said it may revive takeover talks with Yahoo! Inc.(YHOO), the second most popular U.S. search engine, if investors back Carl Icahn's attempt to oust the board and Chief Executive Officer Jerry Yang.
- Investors betting on a rebound in China's tumbling stocks are setting themselves up for more losses, according to Marc Faber, who told investors to bail out of U.S. stocks before 1987's so-called Black Monday crash and correctly predicted last August the U.S. would enter a bear market. Faber's forecast contrasts with local stock analysts, who are as bullish as ever even after a 51 percent plunge in the CSI 300 Index since its October record.
- Manufacturing in Germany and the U.K. declined in May, choked by record commodity prices and slowing economic growth across Europe.

Wall Street Journal:
- GM May Cut Management, Sell Brands, Boost Liquidity.
- Sen. Barack Obama, the presumed Democratic presidential nominee, faces dissent from dozens of top fund-raisers and other supporters of former rival Sen. Hillary Clinton, who are angry over how she was treated during their bruising primary battle and are hesitating to back Sen. Obama.
- US Congress Urges Commodities Watchdog to Speed Up. With oil at more than $140 a barrel, the real fireworks in Washington resume this week on one of the hottest issues in the global economy: whether speculation is contributing to the past year’s doubling of crude-oil prices and should be curbed.

MarketWatch.com:
- Swaps, Enron, London loopholes: a rough guide. A 1993 law extended the definition of a commercial hedger to swaps dealers, as long as they could prove they were hedging a "bona-fide" risk. In practice, the exemption has meant pension funds or other long-term investors can enter a swaps contract with a brokerage such as Goldman Sachs Group Inc.(GS) or Morgan Stanley(MS) to get exposure to a commodity index. The brokerage can then hedge the risk by buying futures in the underlying commodities, such as corn and oil, that make up the index. Because of the swaps exemption, neither the brokerage nor the fund runs into speculative trading limits. The exemption has become the target of analysts and lawmakers who say it's an unfair conduit for funds to build their positions but avoid restrictions placed on other financial traders.

NY Post:
- General Electric(GE) CEO Jeff Immelt has until the end of the year to repair his reputation, citing institutional investors.

The Record:
- Democratic Governor John Corzine to fight oil drilling off New Jersey shore, saying it will endanger the economy and environment.

USA Today:
- Optimism is growing for further withdrawals of American forces from Iraq among military experts. The country’s security continues to improve following a reduction of nearly 25% of US combat brigades. Weekly attacks have plummeted 80% since June 2007. There will be “significant reductions in 2009 whoever becomes president,” said Jack Keane, a retired Army vice chief of staff. Iraqi Prime Minister Nuri al-Maliki said two days ago that “we defeated” the terrorists. US commanders are more cautious about the need to maintain the progress the military’s achieved.

Reuters:
- Energy pricing agency Platts has put Lehman Brothers (LEH) under a temporary review that effectively excludes it from trading benchmark-setting oil contracts, four sources close to the matter said on Monday. Although oil traders have expressed concern over Lehman's write-downs and the turmoil facing Wall Street in the wake of the subprime melt-down, it is unclear to what extent those concerns may be affecting its energy trading operations, or why Platts would have any specific knowledge of its credit condition.

Independent:
- The number of people being placed in permanent jobs by recruitment agencies fell at its fastest rate for more than five years in June – yet further evidence of the severity of the slowdown in the UK economy.

Dagens Nyheter:
- Sweden and the US will spend $37 million to develop a new car powered by electricity. The US The new technique will allow cars to travel further than previous autos powered by electricity. Dept. of Energy will develop the new technique while Ford Motor’s(F) Volvo unit will produce the car.

Expansion:
- Sales of fuel at the pumps of Spanish service stations have fallen 2% in the first five months of the year compared with the same period of 2007, citing data from oil companies. In May, the decline was 4% from the year-ago month.

Emirates Business 24/7:
- Saudi Arabia’s cement capacity will increase by 39% in 2008 to 43 million tons if planned capacity additions are completed. Saudi’s cement capacity is expected to rise further to 49.1 million tons by the end of 2009, citing a report by BMG Financial Advisors.