Today's Headlines

Bloomberg:

- Mortgage rates in the U.S. fell for a second consecutive week, easing concern that a Federal Reserve plan to lower the cost of home loans had lost momentum. The average 30-year rate dropped to 5.2 percent from 5.32 percent, mortgage buyer Freddie Mac of McLean, Virginia, said today in a statement. The 15-year rate averaged 4.69 percent.

- President Barack Obama has failed thus far to clinch the support of a handful of pivotal Democratic senators on two of his top priorities: extending health coverage to the uninsured and reducing greenhouse gases. The lawmakers represent Republican-leaning states, practice bipartisan politics, at times vote against their party and will influence legislation from health care to spending. “Senators aren’t sheep,” Senator Evan Bayh of Indiana said in an interview. He and the four other Democrats in this small group “were hired by their constituents to make independent judgments of their own, not to be told by somebody else what to do,” he said. These independent-minded Democratic lawmakers have all expressed reservations about a central element of Obama’s health-care proposal -- a government-run insurance program that would compete with private plans --and about the cost of capping greenhouse-gas pollution. On health care, these senators all express concern about Obama’s proposal. “How are we going to pay for this at a time when the economy is already sluggish and we don’t want to raise people’s taxes?” Bayh, 53, said. On climate change, these senators are concerned about rising energy costs and the consequences of forcing U.S. businesses to meet stricter standards. “You have to find a way to get the developing world, particularly China and India, to cooperate,” said Bayh. Obama’s plan to limit greenhouse gases and encourage the use of renewable energy is a hard sell in Nebraska, said Nelson, 68. “We’re the only state with 100 percent public power, and when they tell you it could as much as double utility rates in the state, it doesn’t take long to unite the state pretty dramatically,” he said. On fiscal matters, the senators push spending restraint. In April, Nelson and Bayh voted against their party’s $3.55 trillion budget plan for 2010.

- North American refiners will leave about 25% of plants idle by 2014, the International Energy Agency says, as a rise in capacity around the world increases the available supply of gasoline and distillates. Refinery utilization in North America may drop 5 percentage points to 75% as global crude distillation capability increases by 7.6 million barrels a day between 2008 and 2014, the IEA said June 29 in its Medium-Term Oil Market Report. That is more than twice the 3.2 million barrels of projected oil demand growth. The US refinery utilization rate is 2.4 percentage points lower than a year ago, the Energy Dept. said. Plants operated at 87% of capacity in the week ended July 3. The IEA forecast the North American rates to average 80% in the second quarter of this year. “North American refinery utilization is expected to decline slightly from the low levels seen today, as the recovery in demand is met by rising imports and ethanol supplies, rather than a rebound in domestic capacity utilization,” the IEA said.

- Volunteers for a children’s clinic in Moline, Illinois, are collecting empty beer and pop cans after TARP slashed the money it will receive from the city’s John Deere Classic golf tournament. Wells Fargo & Co. and U.S. Bancorp are among those that didn’t renew their sponsorship while under scrutiny for how they’re using Troubled Asset Relief Program money, said Clair Peterson, director of the golf tourney that starts today. Moline-based Deere & Co. is the main sponsor of the event, which was sixth in fundraising among 44 PGA Tour events last year. “A lot of it is just being paranoid about what Congress has said about the sponsorships,” Zach Johnson, the 2007 Masters champion who serves on the Deere Classic’s board, said as he left the 18th green after a practice round this week.

- The U.S. dollar will remain the world’s main reserve currency, White House Press Secretary Robert Gibbs said at the Group of Eight summit today. “Despite whatever talk you might have heard, I don’t see that there is movement away from the notion of the dollar being that currency,” Gibbs told reporters at a briefing at the start of the second day of the three-day meeting in L’Aquila, Italy.

- Inventories at U.S. wholesalers fell in May for a ninth straight month as an increase in sales helped distributors get rid of some of their excess supply. At the current sales pace, it would take 1.29 months for distributors to deplete the amount of goods on hand, the lowest since November, compared with 1.31 months in April. The reading was as low as 1.1 months in June 2008.

- Police fired tear gas as thousands of protesters defied a ban on a march toward Tehran University to mark unrest during student protests in 1999, Agence France- Presse said, citing witnesses. Demonstrators chanted “Death to the dictator” as they gathered in the streets around the university, the center of the protests 10 years ago, AFP said.

- Iranian President Mahmoud Ahmadinejad said that although the world’s powers are angry over his re- election, they must “interact” with his administration. “The enemies of the Iranian people are very angry because, despite their efforts and propaganda, a government will be in power with the support of 40 million votes,” he said in a meeting with officials in Tehran today, according to the state- run Iranian Students News Agency. “We will not give them any advantage, and they must interact with this government.”

- Treasury 10-year note yields will resume the declines posted yesterday even as the US sold $19 billion of the securities and stocks recovered from their lows, according to a Barclays Plc repot citing chart patterns. “The failure to give back session gains speaks to the strength of the bull trend,” the analysts said. The notes face resistance at 3.44% should yields increase, he said.

- The number of Americans filing claims for unemployment benefits fell last week to the lowest since January, as early automotive plant closures altered the timing of layoffs that typically happen at this time of year. The four-week moving average of initial claims, a less volatile measure, fell to 606,000 last week from 616,000.

- General Motors Corp., poised to exit bankruptcy as soon as today, will keep losing U.S. market because it lacks new-model introductions for early 2010, according to Erich Merkle, an independent auto analyst. GM’s only new vehicle slated for that time period is the Chevrolet Cruze compact car, said Merkle, who is based in Grand Rapids Michigan, in an interview today on Bloomberg Radio. “One product, for a company the size of General Motors with its market share, quite honestly isn’t enough,” he said. “Their market-share results will go lower as a result of very poor product cadence. That’s what happens in bankruptcy. A lot of these products are being canceled or delayed.”

Wall Street Journal:

- Chinese President Hu Jintao presided over a meeting of the country's top leaders who vowed "severe punishment" for those responsible for the deadly unrest in the country's northwest, state media reported Thursday, in the first public account of Mr. Hu's actions since he hurried home from a global summit to oversee the response to the turmoil.

- The Public Option Two-Step. Why Obama won’t acknowledge the ‘Trojan Horse’ in the room.

CNBC:

- Oil traders continue to squeeze past tighter U.S. market rules via a loophole that allows them to bet for bigger stakes on certain fuel futures that are under British regulation, brokers and analysts said. The opening in what has been called the London loophole, which U.S. authorities tried to close in June 2008, allows the kind of high-risk plays that concern the Group of 8 leaders who have shone the political spotlight on oil price volatility. Traders buying oil contracts in London played a part in the spike in oil prices to nearly $150 a barrel last year, critics have said. Trading volumes have since jumped on gas oil futures not monitored by the U.S. Commodity Futures Trading Commission (CFTC) on the InterContinental Exchange (ICE) in London. Traded volumes on the gas oil futures contract on ICE surged by more than 20 percent in the first six months of 2009, from the first half of 2008.

NY Times:

- TiVo(TIVO), the Silicon Valley company that popularized the digital video recorder, and Best Buy, the national electronics chain, are forging a broad partnership. On Thursday, the companies plan to announce that Best Buy will heavily promote TiVo products in its 1,100 stores in the United States. TiVo will develop a version of its set-top box, to be sold in Best Buy stores, that will let the retailer advertise its products and services to TiVo subscribers on their home televisions.

- Man Group, the world’s biggest listed hedge fund firm, said investors have continued to withdraw their money although private investor sales have picked up, as flows in the battered industry slowly improve. Investors pulled out a net $1.4 billion in the three months to June, the firm said, helping push assets down to $43.3 billion, Reuters reported.

MarketWatch:
- Cerberus Capital Management LP unveiled a restructuring of its main hedge fund late last week that offers few ways for redeeming investors to get their money back quickly, according to people familiar with the situation. Under the plan, described in a Friday letter from the firm, investors in Cerberus Partners LP will get about 5% of their money back by the end of 2009 at most, the people said on condition of anonymity.

HousingWire.com:

- For the first time since 2006, the nation posted positive quarter-over-quarter price returns in Q209, according to the July Home Data Index Report released Thursday by Clear Capital. Fueled by strong seasonal spring sales in the Midwest, which had a price increase of 5.3% over Q109, the overall US price growth increased by 1.7% in a quarter-over-quarter comparison. The South also added to the surge, climbing 2% from the previous quarter.

Rassmussen:

- The Rasmussen Reports daily Presidential Tracking Poll for Thursday shows that 30% of the nation's voters now Strongly Approve of the way that Barack Obama is performing his role as President. Thirty-eight percent (38%) Strongly Disapprove giving Obama a Presidential Approval Index rating of –8. The President’s Approval Index rating has fallen six points since release of a disappointing jobs report last week (see trends).

Politico:

- In a potentially alarming trend for the White House, independent voters are deserting President Barack Obama nationally and especially in key swing states, recent polls suggest. “This is a huge sea change that is playing itself out in American politics,” said Democratic pollster Doug Schoen. “Independents who had become effectively operational Democrats in 2006 and 2008 are now up for grabs and are trending Republican. “They’re saying, ‘Costing too much, no results, see the downside, not sure of the upside,’” he said.

Miami Herald:

- Some Chinese-made drywall imported into the United States contained radioactive material, news reports suggest, but state and federal tests so far haven't detected it. Copies of customs reports obtained by The Los Angeles Times show drywall made with a radioactive waste product was shipped to the states in 2006 by at least four Chinese manufacturers and trading firms.

Reuters:
- Gold jewelry sales in Dubai are down around 30 percent in June on a year ago, as high prices of the metal and the economic downturn deter tourists from visiting the emirate, five jewelry retailers told Reuters.

- The Obama administration's dash through the bankruptcies for General Motors Corp (GMGMQ) and Chrysler is nearly done, but the debate about the government's conflicted role in reshaping the American auto industry has only just begun. While the administration has been praised for its rapid reorganizations of GM and Chrysler, it has also been blamed for placing itself and its officials in situations with conflicts of interest. The U.S. government stepped in to save GM by becoming its largest creditor and majority investor, positions that inevitably clashed with its role as regulator and referee of its pending deals with outside investors. "Whenever you have a group that is regulator, owner and funder, there is a massive conflict of interest," said David Logan, associate dean at the University of Southern California's Marshall School of Business.

- Banks and hedge funds already go to extraordinary lengths to protect the automated trading secrets critical to generating big, fast profits, but after an purported theft last month, they have even more work to do.

TimesOnline:

- A drug used by transplant patients can extend the lives of mice by about a third, according to research that raises the prospect of a life-prolonging pill for people. Male mice given rapamycin lived on average 28 per cent longer than a control group of animals, while the effect on females was greater still, with a 38 per cent increase in life expectancy. The animals were treated at an age of 20 months, which is the equivalent of 60 years in humans. The study, led by David Harrison, of the Jackson Laboratory in Maine, is the first to identify a drug that can lengthen the lives of mammals, and suggests that similar medical techniques might be capable of doing the same thing in people.

- Man Group’s flagship fund, AHL Diversified, lost investors 11.2 per cent of their money in first five months of the year, as the world’s largest listed hedge fund manager missed out on the sector’s wider recovery.