Today's Headlines

Bloomberg:

- Ford Motor Co.(F), slashing costs to stay off government aid, said it trimmed $9.9 billion of borrowings as the company completed its largest debt restructuring. The transactions, which reduce automotive debt by 38 percent, will “substantially strengthen Ford’s balance sheet,” the second-biggest U.S. automaker said today in a statement. Ford had sought to erase as much as $11.3 billion in notes and loans in a three-pronged effort.

- U.S. companies, adopting a model used by DuPont Co., are adding firms with 300 or fewer lawyers to their outside-counsel roster and saving as much as half compared with fees of Wall Street firms more than triple that size.

- Defense Secretary Robert Gates is recommending the U.S. cap purchases of Lockheed Martin Corp.’s(LMT) F-22 fighter jets at 187 and cancel the company’s VH-71 presidential helicopter and a new Air Force communication satellite.

- The Baltic Dry Index, a measure of world trade, fell to the lowest in more than two months amid speculation of waning Chinese demand for iron ore to make steel. The index of commodity-shipping costs on international routes slid 20 points, or 1.3 percent, to 1,486 points, according to the Baltic Exchange today. That’s the lowest since Feb. 4. Rents for capesize vessels that typically ship iron ore had a 10th straight retreat to $17,081 a day, while rates for smaller panamax ships that compete for the cargoes and also carry grains fell 3.6 percent to $9,162 a day. “China started buying more iron ore in late 2008 and early this year as Chinese steel prices recovered,” Alain William, an analyst with Societe Generale SA in Paris, wrote in a report dated April 3. “There are now fears that too much material is being stocked up in Chinese ports.” Demand for steel from carmakers and builders has slumped with the world economy, expected to shrink 1.7 percent this year by the World Bank. Iron ore stockpiles in China, the world’s biggest steelmaker, grew 14 percent last month while domestic prices for hot rolled sheet, a benchmark product, fell 3.4 percent.

- China and Russia resisted a U.S. call for tougher sanctions against North Korea at an emergency meeting of the United Nations Security Council today after the communist country launched a rocket, prompting international condemnation. Chinese and Russian envoys urged restraint, saying further study was needed to determine whether, as the U.S. asserts, the launch violated UN resolutions prohibiting North Korea from developing missile technology. The positions of the two nations, which can veto any sanctions resolution, signaled the likelihood of protracted negotiations on a UN response.

- Copper, this year’s best industrial- metal investment, may become the worst in the second quarter as demand slumps the most in three decades. Known as the commodity with an economics Ph.D., copper risks losing its reputation as an industrial barometer because prices rose 40 percent by April 3, the best start to a year since at least 1986, just as the global economy contracted for the first time since World War II, according to data compiled by Bloomberg. Prices rose as China, the largest user, agreed to stockpile as much as 400,000 metric tons, based on Macquarie Group Ltd. estimates, enough to fill 18 Olympic swimming pools.

- Gold fell to the lowest price in more than two months, erasing this year’s gains, on speculation that the U.S. economy will rebound, eroding the precious metal’s appeal as an alternative investment. Silver also declined. Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, fell for the first time in two weeks as a rally in equities curbed demand for a haven. “People don’t think they need that flight-to-quality buying and that’s putting gold into the background,” said Stephen Platt, a commodity analyst at Archer Financial Services Inc. in Chicago. “There’s some reallocation of assets moving from gold into equities.”

- Crude oil fell for a second day in New York, declining as much as 4.2%. Crude oil inventories in the U.S., the world’s largest energy-consuming nation, rose to 359.4 million barrels in the week ended March 27, a 15-year high. International Energy Agency will likely lower its global demand forecast this week, given slowing world growth, Executive Director Nobuo Tanaka said April 2.

- The global financial crisis appears to have claimed a new casualty: the Persian Gulf dream of creating a common Arab market in the next few years with its own currency modeled after the European Union. Gulf central bankers met today in Muscat, Oman to discuss plans to create a unified currency, a vision whose near-term prospects are in doubt as the oil-rich states draw up their own plans to deal with the impact of crude prices that have tumbled almost 70 percent from their highs.

CNBC:

- The next round of government stimulus payments must focus on consumers, who are loath to spend now and are losing their historic American optimism, Thomas H. Lee Partners LP Co-President Scott Sperling said. “There is a feeling in this country of unfairness, which is unusual,” fed by the government “getting in the business” of picking winners and losers, Sperling said.

- U.S.securities regulators will consider four proposals to restrict short selling, a type of investing blamed for accelerating the severe downturn in financial services stocks, the chief of the Securities and Exchange Commission said on Monday.

- U.S. air carriers led by Hawaiian Airlines took some of the hassle out of flying last year. The airline industry had its best performance in four years in 2008, private researchers said Monday in their annual study of airline quality, based on government statistics.

- Investors should brace themselves for the long aftershock of oil trending towards $40 a barrel, says Daniel Yergin, Cambridge Energy Research Associates chairman. (video)

NY Times:

- Colony Capital, the real-estate-focused private equity firm, is considering a potential investment in MGM Mirage(MGM), a person briefed on the talks told DealBook on Monday.

MacDailyNews:

- "Barclays is out with an interesting call on Apple raising their tgt to $143 from $113 saying the stock remains one of our top picks given its new product pipeline & very strong free cash flow. They believe new products including a new familiy of iPhones in June & an ultraportable later this year should boost shares," Notable Calls reports.

The Detroit News:

- General Motors Corp.(GM) will unveil the 2010 GMC Terrain crossover, a smaller and more fuel-efficient model, at the 2009 New York International Auto Show on Wednesday along with the Yukon Denali hybrid. The new crossover is being introduced amid a slump in truck and crossover sales for GM, which is subsisting on $13.4 billion in federal aid and has asked for up to $16.6 billion more. The automaker's truck sales, which includes crossovers, were down 47 percent last month compared to a year earlier, worse than the 36.7 percent industry decline in SUV/crossover sales, according to Autodata Corp. The five-passenger, four-cylinder Terrain, which hits showrooms in late summer, will get a segment-leading 30 mpg on the highway and also be available with a 3.0-liter direct injection six-cylinder engine.

Detroit Free Press:

- One way or the other, Chrysler will once again have new owners after April 30. Instead of Cerberus Capital Management and Daimler AG holding 80.1% and 19.9%, respectively, of Chrysler LLC, there will be a larger cast. Under the latest scenario proposed by the U.S. government, Fiat SpA will have the largest block of Chrysler, at 20%. The remaining 80% will be allocated among a variety of secured creditors that include at least five banks and U.S. taxpayers. Cerberus and Daimler likely will hold much smaller stakes because they still hold loans that helped finance the August 2007 acquisition of the Auburn Hills-based automaker. Even the UAW could end up owning a piece of the company.

Politico:

- President Barack Obama sought Monday to make American amends with the Islamic world after eight years of tension, declaring in a speech to the Turkish parliament that he is determined to have a “partnership with the Muslim world.” “Let me say this as clearly as I can: the United States is not – and will never be — at war with Islam,” Obama said in remarks delivered in Ankara. “In fact, our partnership with the Muslim world is critical not just in rolling back the violent ideologies that people of all faiths reject but also to strengthen opportunities for all people.”

Reuters:
- As interest in the health information technology sector swells ahead of government funding to modernize the U.S. healthcare industry's record-keeping system, consolidation cannot be far behind. The U.S. stimulus package includes $20 billion to create computerized systems that can easily communicate with one another, replacing reams of disparate, paper records. Both large and small companies are likely to join forces to increase the scope of their offerings, while others are looking to enter this potentially lucrative business. Some 225 companies are exhibiting for the first time at the annual Health Information Management Systems Society meeting this week, which has drawn more than 23,000 health IT professionals.

Financial Times:
- Continental Europe is seeing steep falls in house prices that could exacerbate the region's already deep recession, even if the declines are receiving less attention than those in the US or UK markets, according a new indicator compiled by the Financial Times. House prices in the 16country eurozone in the final three months of 2008 were 4.8 per cent lower than in the same quarter a year before, the FT's eurozone house price index shows. That was almost as large as the 5.4 per cent drop in the FT's "Europe" house index, which includes non-eurozone countries and was heavily affected by the steep drop in UK house prices. The index, published for the first time today, pulls together national house price indices to give an overview of eurozone trends. House prices have so far not been high on European policymakers' list of concerns. But a European Central Bank research report on innovations in eurozone housing finance last month noted rises in household indebtedness and concluded "the impact of house price changes on the economy is bound to have increased, creating the possibility of more pronounced boom-bust periods".

- It is just as well that world leaders saw last week’s G20 summit a success in the fight to overcome the global economic crisis. A stark report from the International Monetary Fund, disclosed in Monday’s FT, shows what a tough job they face in one key region – central and eastern Europe. The analysis, which covers Turkey, as well as the former Communist states, sees gross domestic product plunging 2.5 per cent this year, against a 4.25 per cent growth forecast last autumn. The report’s forecasts are at the gloomy end of market projections, but not off the scale. The authors estimate the region (excluding Russia because of its huge foreign exchange reserves) must roll over $413bn in maturing external debt this year and finance $84bn in current account deficits, with smaller amounts due in 2010. The Fund assumes the rate of debt rollover will decline to 50 per cent for private debt and 90 per cent for sovereign this year with modest improvements in 2010. On this basis, after allowing for other variables, the IMF estimates the region’s “financing gap” – the money that cannot be found in the market – could be $123bn in 2009 and $63bn next year, or $186bn altogether. The largest gaps are in Romania ($34bn), Turkey ($40bn) and Poland ($59bn), a country which has so far escaped the worst of the crisis. The IMF can help close the $186bn gap with more than $81bn of its resources, based on individual countries’ quotas for IMF financing. Up to $105bn may be needed from other institutions, including the European Union, and from creditor governments. The region’s banks, largely the subsidiaries of west European groups, could face non-performing loans of about 20 per cent of total loans, estimate the authors, though this could be conservative. West European banks, with regional exposure of $1,600bn, could see losses of $160bn. They might need $100bn in new capital – or $300bn in “a more severe full-fledged regional crisis”.

RTHK:
- US Senator John McCain has questioned China's commitment to restraining North Korea, and called on Beijing and Moscow to back punitive sanctions following Pyongyang's rocket launch yesterday. Mr McCain, who stood unsuccessfully for the US presidency last year, was speaking during a visit to Hong Kong. He said the reaction from Beijing and Moscow to the launch -- they urged restraint in handling the North -- had been "predictable." "We all know that the major influence on North Korea is China. Everyone knows that," Mr McCain said. "The Chinese have been, I think, less than committed to restraining North Korea's activities." He said statements by China and Russia amounted to an under-reaction to the gravity of the situation, and he urged the UN Security Council to agree on a tough response. "It is time to turn its past words into meaningful action, including punitive sanctions, against the regime in Pyongyang," Mr McCain said.