Today's Headlines

Bloomberg:

• Illinois Debt Default Insurance Climbs to Record, CMA Data Show. The cost of insuring Illinois bonds against default rose to a record as lawmakers sought to close a $13 billion deficit in the state’s proposed budget for the year starting July 1. The cost of a five-year credit-default swap for the state rose 2 basis points today to 304.64 basis points, or $304,640 per $10 million of debt, as of 11:50 a.m. in New York, according to CMA DataVision.
• Jobless Claims in U.S. Unexpectedly Rose Last Week. The number of Americans seeking jobless benefits last week unexpectedly rose to a one-month high, indicating firings are staying elevated even as the U.S. economy grows. Initial jobless claims increased by 12,000 to 472,000 in the week ended June 12, Labor Department figures showed today in Washington. Economists surveyed by Bloomberg News projected 450,000 claims, according to the median forecast. “The labor market is not improving,” said Steven Ricchiuto, chief economist at Mizuho Securities USA Inc. in New York. “If you really are going to have a sustainable recovery, you need the labor market to improve.” The unemployment rate among people eligible for benefits, which tends to track the jobless rate, rose to 3.6 percent in the week ended June 5 from 3.5 percent.
• Manufacturing Expansion in Philadelphia Area Slows. Manufacturing in the Philadelphia region expanded in June at a slower rate than forecast as a measure of factory employment contracted for the first time in seven months. The Federal Reserve Bank of Philadelphia’s general economic index dropped to 8, a 10-month low, from 21.4 in May. The employment index declined to minus 1.5 from 3.2 in April. The Philadelphia Fed’s index of prices paid decreased to 10 from 35.5 in May. Prices received declined to minus 6.5 from 3.5.
• U.S. House Democrats Lobby to Strip Swaps Rule From Overhaul. A coalition of U.S. House Democrats asked their colleagues to remove a derivatives rule from the financial-regulation overhaul bill, intensifying the debate over the provision in the days before its final consideration. Forty-three members of the New Democrat Coalition, a group of 69 self-described “moderate, pro-growth,” members of Congress, today sent lawmakers a letter opposing the plan crafted by Senator Blanche Lincoln that would ban commercial banks from operating swaps-trading desks. The block of Democrats is now aligned with a group of New York Democrats in opposing the provision, which may threaten its inclusion in the final bill. Lincoln, an Arkansas Democrat, has picked up the support of three Federal Reserve Bank regional presidents in the past week and has pledged to fight all efforts to modify or strip the provision. “In my view, banks were never intended to perform these activities in the first place,” Lincoln said last week during her opening statement to the House-Senate conference committee. “It is this economic activity that contributed to these institutions growing so large that taxpayers had no choice but to bail them out in order to prevent total economic ruin.”
• Copper Drops on Concern Over Strength of U.S. Economic Rebound. Copper fell the most in almost two weeks in after reports signaled an uneven economic rebound in the U.S., the world’s second-biggest consumer of the metal. Manufacturing in eastern Pennsylvania, southern New Jersey and Delaware expanded in June at a slower rate than forecast, an economic index showed today. The number of Americans seeking jobless benefits last week unexpectedly rose to a one-month high, according to Labor Department figures. Copper futures for September delivery slid 9.5 cents, or 3.2 percent, to $2.9185 a pound at 10:40 a.m. on the Comex in New York.
• OPEC will reduce shipments this month amid high inventories and slack demand in Europe and North America, according to tanker-tracker Oil Movements. OPEC will ship 23..58 million barrels a day in the four weeks to July 3, down .3% from 23.66 million a day during the period to June 5, the consultant said. "There's precious little evidence that there's any buoyancy in demand, except to the Far East," Oil Movements founder Roy Mason said. "Europe looks dead. Everything west of Suez is pretty dead except for the Americas, isolated pockets like Brazil."
• Pimco's Gross Increases U.S. Government Debt to Six-Month High.
  

Wall Street Journal:

• BP(BP) Chief Says He Wasn't Involved in Well Decisions.
  
• The Bad News About ObamaCare Keeps Piling Up. It's now obvious that many millions will lose the coverage they have.
• Home Builders Drop As Toll Brothers(TOL) Warns of Recent Weakness. Shares of home builders slumped Thursday after Toll Brothers Inc. (TOL) said recent deposits and traffic have been running behind the year-earlier figures, raising worries demand has weakened more than expected. Toll Chief Financial Officer Joel Rassman said late Wednesday that in the past three weeks, the luxury home builder's per-community deposits have been running about 20% behind the comparable period a year earlier, and its per-community traffic has been 3% behind. He said total net signed contracts in the fiscal third quarter will be less than those signed in the fiscal second quarter. Rassman also said demand in recent weeks had been "quite choppy," though the housing market "has emerged from its darkest period of late 2008 through early 2009." In recent trading, Toll Brothers slid 4.8% to $17.88, down 12% over the past three months. Hovnanian Enterprises Inc. (HOV) fell 4.8% to $4.52, and Beazer Homes USA Inc. (BZH) declined 5.6% to $4.35. Meritage Homes Corp. (MTH) lost 4.7% to $17.83, and KB Home (KBH) slipped 3.9% to $12.43. D.R. Horton Inc. (DHI) fell 3.7% to $10.82, and PulteGroup Inc. (PHM) was down 2.8% to $9.48. "The fear out on the Street is that the slowdown seen post tax credit is more than just a hangover and it's the new norm for housing demand," East said. He added that home builder shares could remain under pressure in coming months, as there are "no easily identifiable catalysts to move the builders up" over the summer. Urani said HAMP was supposed to help cut back on defaults, but instead, it's only delaying them like other mortgage modification programs. "We've got a huge pipeline of people who are delinquent, and we're reaching the spot where banks are cycling over and repossessing their homes," Urani said. "We're still seeing inventory rise because of that, especially with sales slowing down after the tax credit expiration. Rising inventory could really pressure prices."
• Lawmakers Bet on Firms They Oversaw. In 2009, amid the federal government's most aggressive intervention in the U.S. economy in decades, some members of key congressional committees placed bets with their own money on the stocks of companies they helped oversee, according to a preliminary analysis by The Wall Street Journal of public disclosure filings made public Wednesday. The disclosures come at a time of heightened scrutiny over the government's role in the economy during the critical moments of the financial crisis in 2008 and 2009. The Journal has reported that some members of Congress or their spouses made bets during 2008 that U.S. stocks and bonds would fall in value.
• Dying on the Vine: Tomato Prices. Tomatoes Go From Shortage to Glut in a Matter of Weeks. In California, harvest time is arriving just as tomato growers in other parts of the U.S. are reeling from a sudden supply glut that is pushing the price for fresh tomatoes sharply lower. Florida farmers who fetched more than $30 a few months ago for a 25-pound box of round, fresh field-grown tomatoes, also known as slicer tomatoes, are now getting $5 or less. The U.S. Agriculture Department estimates that wholesale tomato prices fell to 25 cents a pound in June, down 78% since March. The current price is "the lowest number that I can remember seeing," says Gary Lucier, an agricultural economist and tomato expert at the USDA.

NY Times:

• Security Tops Environment in China's Energy Plan.

Business Insider:

• San Diego May Go Bust. San Diego is the latest city to consider bankruptcy as a result of burgeoning debt associated with pensions and benefits, according to Bloomberg.

Zero Hedge:

• High Frequency Trading Is Now In Business of Frontrunning Each Others Regulatory Capture. To say that the latest bout of regulatory capture-cum-bribery of SEC individuals by the HFT lobby is getting out of hand, would be like hoping to have your limit bid get hit in any stock without some computer subpennying you to death first. As the below post by Themis Trading indicates, soon there will be no SEC employees left for the HFT lobby left to poach, which is why each HFT firm is now designing new algorithms to predict whom their competitors will poach, and front run said poaching.

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-six percent (46%) Strongly Disapprove, giving Obama a Presidential Approval Index rating of -20 (see trends).
• 46% Rate Obama's Response to Gulf Leak as Poor. Voters are more critical than ever of President Obama's handling of the ongoing Gulf oil spill despite his Oval Office address to the nation Tuesday night laying out what the government has done and intends to do in response. In fact, they're nearly as critical of the president now as they are of BP and Transocean, the two companies responsible for the leak to begin with. The latest Rasmussen Reports national telephone survey of Likely Voters - taken Tuesday and Wednesday nights - finds that 46% of U.S. Voters now give the president a poor rating for his handling of the Gulf situation, the highest level of disapproval yet. That's 12 points higher than two weeks ago and 20 points worse than at the beginning of last month. Thirty-three percent (33%) say Obama is doing a good or excellent job in response to the situation that he calls the worst environmental disaster in U.S. history.

Seeking Alpha:

• The Bad Economic News Is Just Getting Worse. Just consider some of the most recent economic news....

Reuters:

• More Than 90 U.S. Banks Miss May TARP Payments. More than 90 U.S. banks and thrifts missed making a May 17 payment to the U.S. government under its main bank bailout program, signaling a rising number of lenders are struggling to meet their obligations. The statistics, compiled by SNL Financial LC from U.S. Treasury data, showed 91 banks and thrifts skipped the May dividend payment under the Troubled Asset Relief Program, or TARP. It was the first missed payment for 23 of the banks; for the others, it was at least their second miss. The number of banks missing their TARP payments rose for the third straight quarter. In February, 74 banks deferred their payments; 55 deferred last November.
• Europe to Urge Transaction Tax, Bank Levy at G20.
• SandRidge Hedge Fund Down 19% This Year on Natgas. SandRidge Capital, a $1 billion energy hedge fund that also manages money for Citigroup (C), said on Thursday it has lost more than 19 percent on the year after bad bets on U.S. natural gas prices.
• From Hospitals to Free Swimming, UK Halts Spending.
  

Euro Intelligence:

• Why This Crisis Will Go All The Way by Wolfgang Munchau. Whatever the Europeans try to do to alleviate the crisis, it does not work: A blanket bank rescue, a €440bn special purpose vehicle to provide a protective shield, and one austerity package after another. Bond spreads and credit default swap indices continue to rise, and the money market is once again freezing up. This has never happened before to European politicians, who in the past were able to get away with a lot less effort. A statement was usually sufficient to placate the markets. What is going on?

Athens News Agency:

• Greece's private and public-sector union groups will hold a nationwide 24-hour strike on June 29. The strike is being held to protest the government's planned changes to the pension system and labor rules.