Today's Headlines

Bloomberg:

• Euro Slips for Fifth Day on Concern Greece Talks May Fall Short. The euro dropped against the dollar for a fifth day in the longest stretch of decreases since January on concern discussions of a $61 billion aid package for Greece may fail to contain the nation’s debt crisis. The yield premium investors demand to hold Greek 10-year bonds instead of benchmark German bunds climbed to 5.01 percentage points, the highest level since at least March 1998. Canada’s dollar touched the strongest level since June 2008 versus the greenback as traders increased bets on higher interest rates. “Greece bond yields blew out, and that’s making the market nervous,” said Boris Schlossberg, director of currency research at online currency trader GFT Forex in New York. “It’s not confident that the bailout deal is enough, and the euro fell out of bed.” Credit-default swaps on Greece surged 31 basis points, or 0.31 percentage point, to a record 495, according to CMA DataVision prices. Contracts on Portugal jumped 27 basis points to 228, and those on Spain climbed 16 to 161 basis points.
• European Stocks Retreat as Greek Credit-Default Swaps Surge. European stocks declined for the third time in four days, led by Greek, Spanish and Portuguese shares, as the cost of insuring against Greece defaulting on its debt surged to a record.
• Freeport(FCX) Says China Copper Stocks May Weaken Demand. Freeport-McMoRan Copper & Gold Inc. Chief Executive Officer Richard Adkerson said there’s speculation that copper inventories may increase in China and damp demand for the metal later this year. “The copper market is strongly supported by China,” Adkerson said today on a conference call after releasing first- quarter earnings. “Speculation is that some of those imports are going into warehouses and that might affect imports later in the year.” Stockpiles monitored by the Shanghai Futures Exchange have surged 95 percent in 2010, raising concern that exports of the industrial metal to China may slow.
• Morgan Stanley(MS), Goldman Sachs(GS) Raise Commodities Value-at-Risk. Morgan Stanley, which reported earnings today that beat analyst’s estimates, said the company’s average daily risk-taking in commodities rose 17 percent in the first quarter.Value-at-risk in commodity prices, a measure of how much the firm estimates it might lose in a single day, rose to $27 million in the three months ended March 31 from $23 million in the preceding quarter, the company said. Goldman Sachs Group Inc., the most profitable securities firm in Wall Street history, said yesterday that the company’s average daily risk-taking in commodities rose 29 percent in the first quarter. Value-at-risk rose to $49 million in the three months ended March 31 from $38 million in the preceding quarter, the company said. JPMorgan Chase & Co. reported earlier this month that value-at-risk in “commodities and other” fell to $15 million from $17 million in the previous quarter.
• China Exhibits 'Danger Signals,' Marc Faber Says. China’s “excessive” credit expansion and surging real estate prices are “danger signals” that growth is peaking, investor Marc Faber said.“There are some symptoms of a bubble building in China, with the increase in foreign exchange reserves, rapidly rising property prices,” Faber, the publisher of the Gloom, Boom & Doom report, said in a Bloomberg Television interview today. “From here on, the China economy will slow down regardless. Whether it will crash this year or later, I don’t know.”
• Euro May Near Lows as Austerity Slows Growth, State Street Says.
• New York State May Run Out of Money Before July, DiNapoli Says.
• Senate Panel Approves Plan to Make Banks Spin Off Swaps Desk.
  

Wall Street Journal:

• Hotel Chains Struggle Under Debt Burden. More than $60 billion of hotel buyouts during the recent real-estate boom saddled several name-brand hotel chains with mountains of debt. Now, many are finding it tough to restructure and reduce those complicated debt burdens with the hotel industry mired in a downturn.

Business Insider:

• Radical Muslim Site Predicts Assassination of South Park Creators For Making Fun of Mohammed.
• The 32 Systemically Important Financial Institutions That Could Bring The System To Its Knees.
  

zerohedge:

• Portuguese CDS Surge, Hit 235 BPS, Just 7 Away From Record.

AppleInsider:

• California Hospital Plans to Utilize 100 Apple(AAPL) iPads.

Seeking Alpha:

• Hedge Fund Assets Near '07 Peak. Globally, hedge funds can boast of $1.67 trillion in assets, just 2% less than they managed at their peak, according to Hedge Fund Research.

MarketFolly:

• Long/Short Equity Hedge Funds: Net Long Exposure Below Average.

Politico:

• Democrats Haunted by Corporate Ties. President Barack Obama and congressional Democrats are promising a climactic clash with Wall Street, but there’s a complication in their battle plan: The Democratic Party is closer to corporate America — and to Wall Street in particular — than many Democrats would care to admit. Former White House counsel Greg Craig has just signed on as an institutional Sherpa for Goldman Sachs, the iconic financial firm facing fraud charges from the Securities and Exchange Commission. Former House Democratic leader Dick Gephardt lobbies for Goldman Sachs, Visa and the coal industry. Former Senate Democratic leader Tom Daschle — Obama’s first choice to head Health and Human Services — is an adviser for a lobbying firm that represents Charles Schwab, Comcast, Lockheed Martin, Verizon and a host of other corporate interests. Attorney General Eric Holder once lobbied for Global Crossing — sometimes described as the Democratic Enron — and White House chief of staff Rahm Emanuel made eight figures in a little more than two years as the Chicago-based managing director at Wasserstein Perella & Co. between jobs as a senior aide in President Bill Clinton’s White House and as the congressman representing Illinois’s 5th District. And the Democrats rode to their majorities in the House and the Senate on a wave of cash Emanuel and New York Sen. Chuck Schumer helped them raise from Wall Street. Earlier this month, a hedge fund manager at the center of the Goldman Sachs fraud case held a fundraiser for Schumer in New York. “It’s pathetic,” Sen. Bernie Sanders, a liberal Vermont independent who caucuses with the Democrats, said of news that Goldman Sachs has hired Craig. “But it’s what goes on around here.”

Reuters:

• Goldman(GS) Case Warrants Full French Probe - Lagarde. Accusations that Goldman Sachs acted fraudulently warrant a full probe by French regulators, Economy Minister Christine Lagarde said on Wednesday. Regulator AMF (Autorite des Marches Financiers) said it aimed to publish an update on its Goldman probe next week.
• Goldman(GS) Charges Give Rivals New Weapon. In the cut-throat world of investment banking, rivals are looking for ways to use the fraud charges against Goldman Sachs to chip away at the firm’s armor. Investment bankers have been lobbying executives at state-owned Agricultural Bank of China and pushing officials in Beijing to drop Goldman as an underwriter for the more than $20 billion IPO the Chinese bank is preparing, sources told Reuters. Rivals are also asking officials at state-controlled Bank of Communications to ditch Goldman from its joint global coordinator role in the $6.1 billion rights issue that China’s fifth-largest bank is planning for the Hong Kong Stock Exchange.

Financial Times Deutschland:

• IKB Deutsche Industriebank AG has asked its lawyers to prepare a civil suit against Goldman Sachs(GS), citing a person at IKB. IKB lost almost all of a $150 million investment on a portfolio of collateral debt obligations that is at the center of a SEC suit against Goldman.