Today's Headlines

Bloomberg:

• Euro Advances on Speculation Crisis Won't Derail Global Growth. The euro strengthened against the dollar and the yen as stocks climbed on speculation that Europe’s fiscal debt crisis is unlikely to derail global growth, fueling investor appetite for riskier assets. Europe’s common currency also rallied after Germany’s top constitutional court rejected an emergency attempt to block the nation from granting aid guarantees and the European Central Bank’s president said its “temporary” bond purchases will continue. The dollar and yen fell after reports showed economic growth in Asia is accelerating, damping demand for the currencies as a haven.
• Soros Says 'We Have Just Entered Act II' of Crisis. Billionaire investor George Soros said “we have just entered Act II” of the crisis as Europe’s fiscal woes worsen. “The collapse of the financial system as we know it is real, and the crisis is far from over,” Soros said today at a conference in Vienna. “Indeed, we have just entered Act II of the drama.” Europe’s debt-ridden nations have to raise almost 2 trillion euros ($2.4 trillion) within the next three years to refinance maturing bonds and fund deficits, according to Bank of America Corp. “When the financial markets started losing confidence in the credibility of sovereign debt, Greece and the euro have taken center stage, but the effects are liable to be felt worldwide,” Soros said.
• AT&T(T), Boeing(BA) Buck Anti-Incumbent Trend in Giving to Democrats. While Americans may be eager to vote congressional lawmakers out of office, U.S. companies are pouring money into incumbents’ campaigns. And Democrats are the biggest beneficiaries. Democrats fighting to maintain control of the U.S. House are drawing funds from companies such as AT&T Inc.(T), Boeing Co.(BA) and Honeywell International Inc.(HON) Their corporate political action committees are among the top donors to 31 Democratic incumbents seen by analysts as the most endangered this year, a review of Federal Election Commission records shows. Corporate PACs have given the campaigns of those Democrats 14 times more money than they’ve donated to the Republican challengers in the midterm congressional elections. A Gallup Poll conducted May 24-25 found 60 percent of registered U.S. voters would rather support a House candidate who has never served in Congress, compared with 32 percent who favored a nominee with some congressional experience. Overall, corporate PACs gave $5.2 million to the most vulnerable Democrats, compared with $366,000 to their Republican challengers.
• Clive Commodity Fund Loses 6% in May, Worst Decline Since 2008. Clive Capital LLP’s $3.9 billion commodity hedge fund fell 6 percent in May, the biggest drop since July 2008, mostly because of losses in energy and metals. Clive Fund Ltd. declined a cumulative 4.2 percent in the first five months of the year, London-based Clive Capital said in a monthly report to investors.
• U.S. Home Seizures Jump 44% to Record as All States Show Rise. U.S. home foreclosures reached a record for the second consecutive month in May, with increases in every state, as lenders stepped up property seizures, according to RealtyTrac Inc. Bank repossessions climbed 44 percent from May 2009 to 93,777, the Irvine, California-based data company said today in a statement. Foreclosure filings, including default and auction notices, rose about 1 percent to 322,920. One out of every 400 U.S. households received a filing. “We’re nowhere near out of the woods,” Rick Sharga, RealtyTrac’s senior vice president for marketing, said in a telephone interview. “We’re likely to set a quarterly record for home seizures if June is anything like May.”
• Deutsche Bank(DB) CEO Says Stress Tests Could Be 'Very Dangerous'. Deutsche Bank AG Chief Executive Officer Josef Ackermann said publishing stress tests would be “very, very dangerous” if mechanisms to support European banks weren’t in place beforehand. “If we want to disclose the results of stress testing, then we must have backstop facilities in place,” Ackermann, speaking as the chairman of the Institute of International Finance, said at a conference in Vienna today. “Otherwise the uncertainties and instability of the market will increase.”
• Immelt, Gates Push to Boost Clean Energy Spending. General Electric Co.’s(GE) Jeffrey Immelt and Microsoft Corp.’s(MSFT) Bill Gates today called for the U.S. government to more than triple its spending on clean energy research and development to $16 billion a year. The executives, part of group that includes Xerox Chief Executive Officer Ursula Burns and venture capitalist John Doerr, are also recommending the creation of a national energy strategy board. The group, outside advisers created by U.S. President Barack Obama to recommend steps to boost the economy, plans to meet with the president in Washington today.
• SEC Approves Halts for S&P 500 Stocks That Move 10%. The U.S. Securities and Exchange Commission approved rules that will halt trading in Standard & Poor’s 500 Index stocks during periods of volatility, a response to the May 6 plunge that wiped out $862 billion in 20 minutes.

Wall Street Journal:

• U.K. Speaks Out in Defense of BP(BP). British officials offer first public signs of support for company in face of heightened criticism from U.S.
• North Korea Rallies Against South. North Korea's state media over the last two weeks stepped up an anti-South Korea campaign after being accused of sinking a South Korean warship, with reports repeatedly portraying angry citizens vowing to work harder to "get back" at the South. The reports have dominated TV newscasts monitored in Seoul and appeared in newspapers that arrive in South Korea more than a week after publication.
• U.S. Faces 'Severe' AIG Losses, Says Panel. A watchdog panel reviewing the bailout of American International Group Inc. said U.S. taxpayers "remain at risk for severe losses" and that the government didn't act aggressively enough to protect U.S. taxpayers during the 2008 rescue. In a lengthy report, the bipartisan Congressional Oversight Panel concluded that the U.S. government, which owns nearly 80% of the insurance giant, is likely to "remain a significant shareholder in AIG through 2012" and it is unclear if taxpayers "will ever be repaid in full."

CNBC:

• BofA(BAC) Looking at 'Citigroup-Type of Breakup': Bove. Bank of America is shedding some of its foreign banks and other assets while positioning itself for a "Citigroup-type of breakup," banking analyst Dick Bove said Thursday.

MarketWatch:

• Goldman's(GS) Legal Woes Just Beginning. Commentary: Lawsuits, regulatory investigations dogging firm.

Risk.net:

• Protection on Long-term Deflation Hits Highest Levels Since 2008. The cost of option protection against long-term deflation in the eurozone has reached its highest levels since late 2008.

Rasmussen Reports:

• Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Thursday shows that 26% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as president. Forty-three percent (43%) Strongly Disapprove, giving Obama a Presidential Approval Index rating of -17 (see trends).

Politico:

• Lawmakers Seek to Gut Ethics Office. The Office of Congressional Ethics, a powerful symbol of Democrats’ promise to “drain the swamp” in Washington, is in danger of having its power stripped after the midterm elections. Members of the Congressional Black Caucus have led the charge, airing complaints about the aggressive, independent panel in a private session with House Speaker Nancy Pelosi last month, and they’ve drafted a resolution that, if approved, would severely curtail the panel’s power.
• Panel: AIG Bailout 'Poisonous'.
  

The Detroit News:

• Congressman Says GM is Destroying Documents. General Motors Co. executives are destroying documents, e-mails and other records that could shed light on corporate decisions that have triggered investigations by a U.S. House oversight committee, two top Republicans allege. The accusations were made in a letter Wednesday to GM Chairman and Chief Executive Ed Whitacre, and signed by U.S. Rep. Darrell Issa, R-Calif., and U.S. Rep. Jim Jordan, R-Ohio. The politicians asked GM to stop destroying documents that could provide insight into investigations focused on GM's controversial commercial touting its repayment of $6.7 billion in federal loans, and other moves.

Senator Tom Harkin:

• Chairman Harkin Announces HELP Oversight Hearings of Federal Education Dollars at For-Profit Colleges.

Reuters:

• British PM Cameron Pledges Help in BP(BP) Oil Spill. British Prime Minister David Cameron said on Thursday he was ready to help deal with BP Plc's Gulf of Mexico oil spill, speaking out on the crisis while the beleaguered British company's shares took a fresh hit in London but rebounded from a massive slump in New York.
• US Speaker Pelosi Urges BP(BP) to Halt Dividend. A top U.S. congressional leader on Thursday urged BP (BP) to suspend its dividend to make sure businesses hit by the Gulf oil spill get compensation, and accused the British energy giant of a "lack of integrity."

Telegraph:

• China Faces Wave of Strikes After Foxconn Pay Rise. Fears of growing labour unrest in China deepened on Thursday as a series of strikes were reported around the country after workers at Honda and electronics assembly giant Foxconn won dramatic pay rises last week.

Der Spiegel:

• How the United States Became a PR Disaster for Deutsche Bank. Deutsche Bank(DB) is deeply involved in the American real estate crisis. After initially profiting from subprime mortgages, it is now arranging to have many of these homes sold at foreclosure auctions. The damage to the bank's image in the United States is growing.

Frankfurter Allgemeine Zeitung:

• German Chancellor Angela Merkel's demand to expel overspending members from the euro region as a measure of last resort is a "political provocation" that's not in line with European Union treaties, Italian Foreign Minister Franco Frattini said. Even proposals to suspend the voting rights of high-deficit euro region member states have no chance of implementation because such a move would require changes to EU treaties, he said. "For a reform there needs to be unanimity, but there won't be any," Frattini said.

Cinco Dias:

• Spanish lenders are applying to become members of central counterparty systems such as Eurex and London Clearing House to offset the lack of short term financing in the interbank market, citing an industry official.

El Pais:

• Negotiations between Spanish unions and employers over proposed changes to labor legislation ended without agreement early today, citing people in the Labor Ministry it didn't identify.

China Daily:

• Home sales in Beijing hit a record low of 428 last week and could fall further, citing real-estate agents and analysts. The average daily volume of home sales fell to under 100 for the fourth week running, citing government data.The government's "stringent" second-home mortgage policy, which went into effect on April 15, and a wait-and-see attitude from buyers are being blamed for the decline.