Bloomberg:
- Federal Reserve Chairman Ben S. Bernanke said while the economy is showing “tentative signs of stabilization,” the central bank intends to maintain a “highly accommodative” monetary policy for “an extended period.” “The pace of decline appears to have slowed significantly,” Bernanke said today in semi-annual testimony before the House Financial Services Committee. At the same time, “in light of the substantial economic slack and limited inflation pressures, monetary policy remains focused on fostering economic recovery,” he said.
- CIT Group Inc.(CIT), the 101-year-old commercial lender seeking to avoid collapse, said it expects to report a loss of more than $1.5 billion for the second quarter and may need to file for bankruptcy if it’s unable to tender for notes maturing next month.
- General Electric Capital Corp. bonds were cut to “underweight” because the finance company’s $6.6 billion of reserves to protect against losses on its loans are “inadequate” compared with large banks such as JPMorgan Chase & Co. and Citigroup Inc, Barclays Capital said.
- Representative Steny Hoyer, the No. 2 House Democrat, left open the possibility that his chamber’s members may leave town next month without voting on health-care legislation, saying lawmakers still need to reach a consensus. President Barack Obama has asked the House and Senate to pass their separate versions of health-care legislation before the chambers recess for a summer break.
- Corn prices fell to a seven-month low and soybeans declined the most in two weeks as cool, wet weather in the Midwest helps plants develop, boosting yield prospects for two biggest U.S. crops. Weekly crop ratings by the U.S. Department of Agriculture were the highest since 2004, when average yields per acre for corn were a record 160.4 bushels with soybeans at 42.2 bushels. Conditions will improve in the next five days with as much as 2.6 inches (6.6 centimeters) of rain, government data show. “Crop conditions are very good because the cool weather has limited any stress from pockets of dry weather,” said Phyllis Nystrom, a branch manager at Country Hedging Inc. in Inver Grove Heights, Minnesota. “The markets will track lower because there is no threatening weather for crops, with more rain in the forecasts.”
Wall Street Journal:
- The U.S. system for taxing mutual funds needs to change to keep the domestic-fund industry competitive with Europe, according to a person who consults on funds to the Securities and Exchange Commission. John C. Coates, a professor at Harvard Law School, has written a set of recommendations on taxing and regulating mutual funds that says some features of the U.S. industry are anticompetitive. In a report released by the Committee on Capital Markets Regulation, an independent, nonpartisan research organization, Mr. Coates proposes several changes.
NY Times:
- Stretching over vast cattle estates at the foothills of the Andes, Barinas is known for two things: as the bastion of the family of President Hugo Chávez and as the setting for a terrifying surge in abductions, making it a contender for Latin America’s most likely place to get kidnapped. An intensifying nationwide crime wave over the past decade has pushed the kidnapping rate in Venezuela past Colombia’s and Mexico’s, with about 2 abductions per 100,000 inhabitants, according to the Interior Ministry. But nowhere in Venezuela comes close in abductions to Barinas, with 7.2 kidnappings per 100,000 inhabitants, as armed gangs thrive off the disarray here while Mr. Chávez’s family tightens its grip on the state. Seizures of cattle ranches and crumbling infrastructure also contribute to the sense of low-intensity chaos.
- If the Obama administration has a strategy for reviving manufacturing, Douglas Bartlett would like to know what it is. Buffeted by foreign competition, Mr. Bartlett recently closed his printed circuit board factory, founded 57 years ago by his father, and laid off the remaining 87 workers. Last week, he auctioned off the machinery, and soon he will raze the factory itself in Cary, Ill. “The property taxes are no longer affordable,” Mr. Bartlett said glumly, “so I am going to tear down the building and sit on the land, and hopefully sell it after the recession when land prices hopefully rise.”
MarketWatch:
Hedge fund industry assets jumped during the second quarter as many managers generated strong returns, but investor redemptions continued, albeit at a slower pace, Hedge Fund Research said on Tuesday.
The Washington Times:
- A world-renowned clinic that President Obama held up as an example of good medicine said Monday that the American people would be "losers" under the House's health care proposal, joining the growing chorus of critics the Obama administration is trying to fend off as the debate intensifies from Capitol Hill to Main Street. Minnesota's not-for-profit Mayo Clinic, which Mr. Obama has repeatedly hailed as offering top quality care at affordable costs, blasted the House Democrats' version of the health care plan as lawmakers continue to grapple with several bills from each chamber and multiple committees. The Mayo Clinic said there are some positive elements of the bill, but overall "the proposed legislation misses the opportunity to help create higher quality, more affordable health care for patients." "In fact, it will do the opposite," clinic officials said, because the proposals aren't [R]patient-focused or results-oriented. "The real losers will be the citizens of the United States."
The Detroit News:
- Ford Motor Co.(F) CEO Alan Mulally called on GMAC to start acting like the commercial bank it has become, saying its first obligation should be to shareholders -- not General Motors Co. and Chrysler Group LLC. GMAC, which received government approval to become a commercial bank earlier this year, is the primary lender for GM and Chrysler. Mulally said Ford "is not being disadvantaged" by GMAC's status, but said government approval of Ford's application to form an industrial bank would help.
Wired:
- Rumors have swirled about Apple readying a new version of the iPod Touch with a camera and microphone, which, combined with a Skype account, would pretty much obviate the need for a home phone line once and for all. A well-connected source tells us those rumors are on the money, and that Apple’s factories in China are already manufacturing iPod Touch models with integrated cameras and microphones.
Forbes:
- A Long Island hedge fund known for making controversial deals in penny stocks continues to be accused by its investors of making up its returns. The latest accusations against NIR Group's $770 million family of hedge funds, run from Roslyn, N.Y., by 38-year-old Corey Ribotsky, come from investor Steven Mizel, who in a lawsuit against Ribotsky and one of his funds claims they "appear to have provided investors with valuations of the Fund's securities which are wholly fanciful."
Politico:
- Trust in President Barack Obama and his Democratic allies to identify the right solutions to problems facing the country has dropped off significantly since March, according to a new Public Strategies Inc./POLITICO poll. Just as Obama intensifies his efforts to fulfill a campaign promise and reach an agreement with Congress on health care reform, the number of Americans who say they trust the president has fallen from 66 percent to 54 percent. At the same time, the percentage of those who say they do not trust the president has jumped from 31 to 42. The president’s party has taken a similar hit since the last Public Trust Monitor poll, with only 42 percent of respondents saying that they trust the Democratic Party, compared with 52 percent who do not. The party’s numbers are nearly the inverse of March’s survey, in which 52 percent said they trusted Democrats and 42 percent did not.
Washington Post:
- Sen. Christopher J. Dodd has been a friend to the nation's largest financial firms for nearly three decades, and they have been his most generous donors. But now he finds himself in political trouble, and is trying to prove the relationship is over. In recent months, Dodd, chairman of the Senate banking committee, has traded quiet advocacy of measures favored by financial companies for a vocal crusade to rein in those very firms, whose excesses are widely blamed for the economic crisis. He has stopped accepting donations from banks supported by federal bailout money. And he has spent $500,000 on campaign ads that bash credit card companies as "loan sharks" and paint financial lobbyists as crybabies who think Dodd is "a big meanie" because he won't take their calls. It remains to be seen how the Connecticut Democrat's makeover will play back home, where voters have been disillusioned by a steady drip of negative reports about Dodd's relations with the rich and powerful. In a state dominated by Democrats, polls show him trailing a little-known Republican challenger ahead of next year's Senate election.
USA Today:
- Qualms about President Obama's stewardship of the economy are growing, a USA TODAY/Gallup Poll finds, as Americans become more pessimistic about when they predict the recession will end. At six months in office, Obama's 55% approval rating puts him 10th among the 12 post-World War II presidents at this point in their tenures. When he took office, he ranked seventh. Lower ratings could make it more difficult for him to prevail on his top legislative priority. By 49%-47%, those surveyed disapprove of how he is handling the economy, a turnaround from his 55%-42% approval in May. The steepest drop came from conservative and moderate Democrats. By 50%-44%, they disapprove of how he is handling health care policy. A 59% majority say his proposals call for too much government spending and 52% say they call for too much expansion of government power. The administration's stimulus package isn't seen as a benefit by most whether viewed in the short term or the long term, in how it will impact the country or individuals. Only a third think it will help their own family's finances in the long run. Obama "might make the policies more popular by being associated with him," says historian H.W. Brands of the University of Texas-Austin. "But it's almost equally possible that it will make him less popular by linking him with those policies."
Financial Times:
Paul Purcell, the chairman, president and chief executive of RW Baird, the middle-market investment bank, is famous in the financial industry for having a "no asshole" rule. This, he explains, refers to "anyone who puts themselves ahead of the client or ahead of the firm". Mr Purcell welcomes each new employee by telling them he will not tolerate such behavior. "In a polluted work environment - and this is especially true on Wall Street - people end up spending 25-30 per cent of their time positioning internally to make more money," he says. "So when you get rid of those people, everyone else focuses on being more productive." Mr Purcell is quite specific about who caused the downturn. "It's all about the greed of fixed-income people," he says. "Go back and look at the history of Wall Street - Drexel Burnham, Salomon Brothers, Kidder Peabody, Bear Stearns, Long-Term Capital Management, Lehman Brothers, Merrill Lynch - the fixed-income guys blow up every firm." Baird should perhaps be thankful. As jobs have evaporated on Wall Street, the group has been able to hire top talent departing from its bigger rivals and increase market share as its competitors have cut their middle-market teams. In its research department, for example, Baird has increased its staff from 97 to 119 since 2008, while the number of top staff - managing directors and above - has risen from 136 to 183 in the past two years.
- The UK has western Europe's highest percentage of financially distressed companies after being the leveraged buy-out capital over the past decade, a report shows. The UK has just under a quarter of all distressed assets, as at July 1, said bankers at Close Brothers in a report based on data from Debtwire. The UK had 24 per cent of distressed companies in 2009, while Germany had 14 per cent, Italy had 12 per cent and France had just 6 per cent.
Rheinische Post:
- A politician from German Chancellor Angela Merkel’s Christian Democratic Union said Israel would be “committing suicide” as a democratic state if it doesn’t stop building settlements on “Palestinian territory”. Ruprecht Polenz, the chairman of the Foreign Affairs Committee in Germany’s lower house of parliament, or Bundestag, said that a two-state solution can only emerge with east Jerusalem as the capital of a Palestinian state.
Press Association:
- Several Chinese internet sites and parts of popular web portals have gone offline amid tightening controls that have left web users without access to Facebook, Twitter and other social networking sites. Digu and Zuosa, two Chinese websites that offer micro-blogging services similar to Twitter, were both shut down for maintenance, according to notices posted on their homepages. A Digu spokeswoman said the site was offline so it could be moved to a new server. She said it would be down for at least a week. "It's a sensitive period, so we are not in a rush to re-open it," she said, adding that some Digu users had recently tried to post politically sensitive material to the site and that the company was having to censor such content. The technology channels of the popular Sina and Netease web portals were also shut, apparently because they had posted news about a corruption probe without clearance from state censors.
Salaam News Web:
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