Today's Headlines

Bloomberg:

- JPMorgan Chase & Co.(JPM), Goldman Sachs Group Inc.(GS) and Morgan Stanley(MS) were among 10 lenders that won U.S. Treasury approval to buy back $68 billion of government shares, freeing them from added oversight that curbed lending practices, hiring and pay.

- Warren Buffett’s Berkshire Hathaway Inc. doubled its municipal-bond holdings in nine months amid record swings in the value of the securities that the billionaire investor labeled “unthinkable.” Berkshire increased its investment in debt issued by state and local governments to $4.05 billion as of March 31 from $2.05 billion on June 30, 2008, the Omaha, Nebraska-based company said in regulatory filings. Berkshire added $1.09 billion to the bet in last year’s third quarter and $985 million in the first three months of 2009.

- Treasury Secretary Timothy Geithner said federal bank regulators and the Securities and Exchange Commission will play key roles in the administration’s effort to change the way financial executives are paid. Geithner said the Obama administration is moving ahead with its guidelines on corporate compensation, part of a broader plan for an overhaul of financial regulation that will be announced next week.

- Treasury notes maturing in five years and less gained as yields near a seven-month high helped spur investor demand at the government’s record-tying auction of $35 billion of three-year securities.

- France plans to sell 30-year and inflation-protected bonds this year as the economic slump forces the country to raise a record amount of debt.

- Goldman Sachs Group Inc.(GS) and UBS AG will stop publishing independent stock-research reports in the U.S. next month after a settlement forcing banks to produce them expires. Goldman Sachs and UBS both said in e-mailed statements today that they will stop offering third-party research after the agreement expires on July 26.

- The Standard & Poor’s 500 Index is approaching a so-called golden cross that’s considered a buy signal by analysts who make predictions based on patterns in price charts. A golden cross occurs when the 50-day moving average, which is currently at 878.04 for the S&P 500, rises above the 200-day moving average, which is at 918.33, Bloomberg data show. The formation implies further gains for the stock market, according to this type of technical analysis.

- U.S. 10-year Treasury yields may have peaked, MIG Investments SA said, citing technical indicators. The TD Combo indicator, which examines a security’s price patterns to determine whether a trend is losing momentum, signaled the increase in 10-year yields may be coming to an end, according to Paul Day, chief market analyst at MIG in Neuchatel, Switzerland. A second technical indicator, called the TD D-Wave, also shows a possible top in yields, he said.

- The Wall Street firms that trade directly with the Federal Reserve say speculators betting that interest rates may head higher this year are wrong. Policy makers will keep the target for overnight loans between banks in a range of zero to 0.25 percent this year, according a survey of 15 of the 16 primary dealers of U.S. government securities that trade with the central bank. A majority predict no increase until at least the second half of 2010.

Wall Street Journal:

- The Obama administration is backing away from seeking a major reduction in the number of agencies overseeing financial markets, people familiar with the matter say, suggesting that the current alphabet-soup of regulators will remain mostly intact. Administration officials had suggested they might push for major regulatory consolidation in the wake of the financial crisis. But now they expect to call for most existing agencies to have broader powers to limit risk-taking by financial institutions, say the people familiar with the planning.

- Internet traffic will increase fivefold over the next five years, driven in large part by a jump in the amount of video transmitted across the network, according to Cisco Systems. The finding highlights a study of the demand on communications networks between 2008 and 2013 that the computer-equipment maker plans to release Tuesday. By 2013, Cisco expect Internet traffic—in this case a broad category that includes delivery of content to televisions and mobile phones—to reach about 56 exabytes per month, up from about nine exabytes per month in 2008. More than 90% of this traffic will come from video–be it television, video on demand, or file sharing between computers. Cisco also predicts that video chat will increase tenfold between 2008 and 2013. Another place where Cisco predicts the amount of data will explode is mobile, as the amount of data flowing to mobile devices will double each year, increasing 66 times by 2013. Again, video will be the fastest growing category.

- Hedge fund assets continued to shrink in the first quarter, but outflows have started to slow, according to the newest Lipper TASS Asset Flows report. Net outflows amounted to US$115.71 billion in the first three months of the year, 21% less than outflows in the previous quarter. Globally, hedge fund assets are estimated to have decreased to US$1.18 trillion at the end of March, from US$1.29 trillion at the end of December 2008. All hedge fund strategies continued to post outflows in the first quarter as the industry faced more investor redemptions amid volatile global markets. Equity long-short funds recorded the most outflows, losing US$34.04 billion, followed by event-driven and multi-strategy funds.

- Suicide attackers in a truck launched an assault Tuesday on a luxury hotel commonly used by foreigners in Peshawar, firing guns as they stormed past guards and then setting off a huge blast that killed at least five people and wounded 65 more, Pakistani officials said. No one immediately claimed responsibility for the attack in the largest city in Pakistan's restive northwest, but it fit the pattern of recent Taliban attacks the militants said were in retaliation for a military campaign against militants in the Swat Valley region.

CNBC:

- A Senate committee has approved opening the eastern Gulf of Mexico to oil and gas drilling within 10 miles (16 kilometers) of the Florida Panhandle and within 45 miles (72 kilometers) of the rest of the state's coastline.

NY Times:

- The crisis has presented the European Union with its greatest challenge, but even many committed Europeanists believe that the alliance is failing the test. European leaders, their focus on domestic politics, disagree sharply about what to do to combat the slump. They have feuded over how much to stimulate the economy. They argue about whether the European Central Bank should worry more about the deep recession or future inflation. And they have rushed to protect jobs in their home markets at the expense of those in other member countries.

LA Times:

- Broadcasters compete to put TV on cellphones. The digital switch will let live video be sent to mobile devices -- phones, computers, car systems -- on the newly available analog spectrum. Contenders include MobiTV, Qualcomm's(QCOM) Flo TV and Transpera.

FINalternatives:

- Renaissance Technologies finally turned the corner in May, although its positive return paled in comparison to that of its fellow hedge funds and of the broader markets. RIEF rose between 0.61% and 0.8% in May, depending on which of its eight share classes one invests with. But the fund is still down by double digits after a brutal March and April; through the first four months of the year, the fund was down between 16.86% and 17.61%, while the average hedge fund is up in excess of 10%.

Reuters:
- Global revenue in the chip foundry market is expected to post a sequential rise in the second quarter after three quarters of declines, but 2009 will remain challenging for foundries, market search firm iSuppli said. Global revenue for foundries, or contract chipmakers, including sector leaders TSMC, UMC and Chartered Semiconductor, was set to rise to $3.6 billion in the second quarter, iSuppli Corp said in a statement seen by Reuters on Tuesday. That would be an increase of about 60 percent from the first quarter's $2.25 billion, iSuppli said.

- As the economic crisis squeezes U.S. government budgets and priorities shift beyond defense, the world's top defense contractors will likely turn to acquisitions to ensure they can keep growing. They won't be looking for blockbuster deals but takeovers for less than $1 billion in niche areas that have been identified by governments as high priorities.

Financial Times:
- Standard & Poor’s, the ratings agency, on Tuesday warned that sovereign ratings of a number of Asian economies had come under pressure as their massive economic stimulus measures put a strain on their budgets. The warning came as Fitch Ratings cut Malaysia’s long-term currency rating from A+ to A on concerns over the country’s mounting budget deficit. Malaysia has introduced M$67bn (US$19bn) in stimulus packages. “The worst of the economic dislocation in Asia Pacific appears to be over, if recent indicators are to be believed, but fiscal deterioration resulting from stimulus and banking sector support measures will continue to put pressure on a number of sovereign ratings in the medium term,” it said. Fitch Ratings did not appear to agree with S&P that the worst was over, as it downgraded the outlook for a number of Asian economies on Tuesday.

Telegraph:

- Lord Rothschild, the head of the English branch of the banking dynasty, has withdrawn his investment from Atticus Capital, the hedge fund where his son is co-chairman.

YnetNews.com:
- Palestinian officials said Monday they were close to reaching an agreement with the US according to which the Obama administration would demand an Israeli withdrawal from positions that were manned by Palestinian forces prior to the outbreak of the second intifada at the end of September 2000.

Emirates Business 24/7:
- Emirates NBD's (ENBD) non-performing retail loans (NPLs) have increased by double digits in the past six months. The bank has also seen an increase in fraudulent activities, primarily in documentation, a senior bank executive said. "For the retail business, NPLs have increased by double digits in the past six months especially from unsecured business such as personal loans and credit cards," Suvo Sarkar, Executive Vice-President and General Manager, Retail Banking, Emirates NBD told Emirates Business.

Haaretz.com:

- Prime Minister Benjamin Netanyahu believes that U.S. President Barack Obama wants a confrontation with Israel, based on Obama's speech in Cairo last week, Netanyahu's confidants say. In Netanyahu's opinion, the Americans believe an open controversy with Israel would serve the Obama administration's main objective of improving U.S. relations with the Arab world, the aides say. Israel historically has depended on the White House to balance the consensus of officials in the state and defense departments; this consensus usually leans toward the Arab side. Israeli officials say that under Obama, the White House has become the main problem in relations.

Aswat al-Iraq:

- Iraq started developing crude oil deposits near its borders with Kuwait and Iran, citing an Oil Ministry spokesman.