Today's Headlines

Bloomberg:

• Commodities Rally, Europe Stocks Drop on Greek Debt Downgrade. Commodities rebounded from the steepest weekly slump since 2008 amid optimism about economic growth and speculation recent declines were excessive. European stocks fell, the euro erased gains and Greek bonds tumbled as Standard & Poor’s cut its rating on the nation. The S&P GSCI Index of 24 raw materials jumped 2.2 percent, the most in seven weeks, at 11:35 a.m. in New York following last week’s 11 percent slide. Silver futures climbed 5 percent, oil rallied 3.7 percent and wheat advanced 3.3 percent.
• Greece Leads Surge in European Debt Risk on 'Selective Default' Concerns. Greece led a surge in the cost of insuring European government bonds as Standard & Poor’s cut its credit rating on concern the nation is heading for a “selective default” by extending debt maturities. Credit-default swaps on Greece jumped 30 basis points to a record 1,371 basis points, according to CMA. Swaps on Ireland reached an all-time high of 681 basis points and contracts on Portugal also rose. “One by one, they will all need to renegotiate,” said Bill Blain, co-head of strategy at broker Newedge in London. “As Europe’s most peripheral economy, Greece is just a canary in the coal mine.” Greece was cut two steps to B by S&P, five levels below investment grade, and kept on CreditWatch with negative implications. An extension of debt maturities will be regarded as “burden sharing” for private investors and constitute a “distressed exchange,” the ratings firm said. Swaps on Ireland climbed 22 basis points, according to CMA. Contracts on Portugal rose 16.5 basis points to 659, approaching the record 681 set April 26. Italy increased 11 basis points to 164 and Spain rose 13 to 259, helping push the Markit iTraxx SovX Western Europe Index of swaps on 15 governments up 8 basis points to 197. The Markit iTraxx Crossover Index of 40 companies with mostly high-yield credit ratings rose 6 basis points to 359, according to JPMorgan Chase & Co. The Markit iTraxx Europe Index of 125 companies with investment-grade ratings rose 2.5 basis points to 98.25, JPMorgan prices show. The Markit iTraxx Financial Index of 25 banks and insurers increased 6 to 138.5 and the subordinated index was 14 higher at 242.5.
• Trichet Says Global Central Bankers United in Inflation Fight. European Central Bank President Jean- Claude Trichet said the world’s central bankers are united in fighting inflation fueled by surging commodity prices and fast- growing emerging economies. “There is a solid unity of purpose of all central bankers concentrated on solidly anchoring inflation expectations,” Trichet said today in Basel, Switzerland, after chairing the Global Economy Meeting. The global economic recovery has been “confirmed” and there is “potential for real overheating in emerging countries,” Trichet said. Global rate setters are growing more concerned about inflation as the world economy gathers strength and food and oil prices increase.
• LinkedIn Boosts IPO, Valuing Site at More Than $3 Billion. LinkedIn Corp. increased its planned initial public offering, valuing the largest professional social-networking website at more than $3 billion. The company now plans to sell as much as $315.6 million of shares to expand the business, according to regulatory filing today.
• McDonald's(MCD) April Sales Rise 6% as Drinks Lure U.S. Diners. Analysts projected comparable-store sales would rise 4.1 percent, according to the average of seven estimates compiled by Bloomberg News. Sales in the U.S. climbed 4 percent, the Oak Brook, Illinois-based company said today in a statement.
• Hertz(HTZ) Bids $2.24 Billion for Dollar Thrifty(DTG) to Thwart Avis(CAR). Hertz Global Holdings Inc. (HTZ), the largest publicly traded rental-car company, offered to buy Dollar Thrifty Automotive Group Inc. (DTG) for $2.24 billion in cash and stock, countering a bid by Avis Budget Group Inc. (CAR) Hertz offered $72 a share, 24 percent more than Avis’s offer, the Park Ridge, New Jersey-based company said today in a statement. Dollar Thrifty rose $8.76, or 13 percent, to $78.45 at 10:58 a.m. in New York Stock Exchange composite trading.
• Syria Attacks Protesters as Yemen Violence Flares, Threatening Peace Plan. Security forces in Syria renewed their assault on pro-democracy protesters across the country, shooting at people who joined in demonstrations and seeking to arrest their organizers. Two people were killed in Deir Al-Zour late yesterday as security forces attacked a protest and at least 12 people died in Homs in the past two days, Mahmoud Merhi, head of the Arab Organization for Human Rights, said in a phone interview from Syria today. Six people, four of them women, were killed in Banias on May 7, he said. Some 450 people have been arrested in the coastal city in the past two days, said Ammar Qurabi, head of Syria’s National Organization for Human Rights.

Wall Street Journal:

• Pakistani Leader Defends Military Over bin Laden. Pakistan's prime minister sought to assuage spreading anger at home over the U.S. raid that killed Osama bin Laden in a defiant speech to parliament, rejecting accusations that Pakistanis shielded the al Qaeda leader and suggesting the terror network was created by the U.S.
  

MarketWatch:

• How (CRM) Gets to $300 by Cody Willard.
• FDIC's Bair to Leave Agency July 8th.
  

Zero Hedge:

• Here We Go Again: German Government Advisor Says Eurozone May Not Remain Intact Over Next 12 Months.

Washington Post:

• US Administration Planning $1 Billion Debt Relief for Egypt. The Obama administration has decided to provide about $1 billion in debt relief for Egypt, a senior official said Saturday, in the boldest U.S. effort yet to shore up a key Middle East ally as it attempts a democratic transition. The aid would be part of a major economic aid package that also includes trade and investment incentives, officials said. Economic assistance for Egypt and Tunisia is “fundamental to our capacity to support their democratic transitions,” a senior State Department official said on the condition of anonymity. He said that officials were in the midst of “intense policy formulation” but that the economic package wasn’t finished. Parts of it will need congressional approval. The Egyptian finance and planning ministers visited Washington last month to seek forgiveness of the country’s $3.6 billion debt. Egypt pays about $350 million a year to service the debt, which it incurred buying American farm products. Rep. Dana Rohrabacher (R-Calif.) said at a recent hearing that the United States can’t afford to provide aid as it did in the past. “The stakes [in the Middle East] are very high ... but so is our level of deficit spending,” he said. Some lawmakers want to delay action until they have a better sense of who comes to power in the countries undergoing revolutions. Since the uprisings, the Obama administration has offered Egypt $150 million for economic development and democracy-building, and Tunisia $20 million. A U.S. government agency, the Overseas Private Investment Corp., has also pledged up to $2 billion in loans, loan guarantees and risk insurance for U.S. firms investing in the Middle East and North Africa, on top of an existing $2.6 billion.

The Detroit News:

• Michigan to Get $200 Million for High-Speed Rail. Michigan officials are expected to learn today the state has won about $200 million in federal funds to make high-speed rail a reality.
  

Seeking Alpha:

• Top Biotech Picks by Hedge Fund and Mutual Fund Gurus Concentrated in the Sector.
• The Oil Market Mirage. We want to look at the state of oil demand and the ongoing “China-Saves-the-World” premise.

TechCrunch:

• Apple(AAPL) May Not Have Bought Nuance(NUAN) But...

Real Clear Markets:

• Another Nail In The Keynesian Coffin. The coffin of Keynesianism has so many nails in it now that it is practically surfaced in steel. The notion that government deficits "stimulate" demand, has been proved wrong so many times, and in so many ways, that you would have to be Paul Krugman to still believe in it. However, in its April 28 news release on 1Q2011 GDP, the BEA drove yet another factual wooden stake into Keynesianism's vampire heart - a stake that no one seems to have noticed. What happened should also serve as a warning to Republicans that are still in the grip of the Keynesian superstition. The BEA reported that its first estimate of 1Q2011 real GDP growth was 1.8%. This represented a dramatic fall from 4Q2010 growth of 3.1%. What no one seems to have noticed is that the slowdown occurred in the face of another large dose of Keynesian stimulus.

Politico:

• Gay Donors Fuel Obama's 2012 Campaign. President Barack Obama’s reelection campaign is banking on gay donors to make up the cash it’s losing from other groups of wealthy supporters who have been alienated and disappointed by elements of Obama’s first term. Pleased by an all-out White House push to repeal “don’t ask, don’t tell,” gay donors have surprised campaign officials with the extent of their support. And the campaign’s new fundraising apparatus appears designed to capitalize on their enthusiasm: Obama’s finance committee included one gay man in 2008; there are 15 this year, a source said.

Rasmussen Reports:

• 57% Favor Repeal of Health Care Law. The latest Rasmussen Reports national telephone survey shows that 57% of Likely U.S. Voters now at least somewhat favor repeal of the law. Thirty-six percent (36%) oppose repeal. The new findings include 44% who Strongly Favor repeal of the measure and 26% who are Strongly Opposed.

Reuters:

• Attorney General Eric Holder Vows to Close Guantanamo. U.S. Attorney General Eric Holder said Monday the United States would close the Guantanamo Bay facility holding terrorism suspects in Cuba, despite missing a previous deadline to do so.
• Could Renren Be Vulnerable in a Chinese Crackdown? Imagine buying shares in a company that could be closed down overnight. That is in some ways what Renren (RENN.N), dubbed the Facebook of China, asked investors to do. This week, investors complied: Renren raised $743.4 million in an initial public offering and its shares jumped 29 percent on their first day of trading on the New York Stock Exchange. But Renren's operations, which include social networking, gaming and online commerce, walk a thin line of compliance with strict Chinese regulations around freedom of information -- and if they cross the line, the consequences could be very severe.
• Special Report: What Really Triggered Oil's Greatest Rout. When oil prices fell below $120 a barrel in early New York trade last Thursday, a few big companies that are major oil consumers started buying around $117. It looked like a bargain. Brent crude had been trading above $120 for a month. But the buying proved ill-timed. Crude kept on falling. "They were down millions by the end of the day, trying to catch a falling piano," an executive at a major New York investment bank said. Never before had crude oil plummeted so deeply during the course of a day. At one point, prices were off by nearly $13 a barrel, dipping below $110 a barrel for the first time since March.
• Biden, Clinton Bluntly Press China on Human Rights. Vice President Joseph Biden warned China Monday the United States would press hard on human rights, over which the two sides have a "vigorous" disagreement and criticizing Beijing's latest crackdown on dissent. Biden and Secretary of State Hillary Clinton both used unusually blunt language on human rights at the start of an annual meeting of top officials from the two nations, saying the United States was concerned about Beijing's recent clampdown, which has involving arrests, detentions and secretive confinement of human rights lawyers, protesters and dissidents. "No relationship that's real can be built on a false foundation. Where we disagree, it's important to state it. We will continue to express our views on these issues," Biden said at the opening of the Strategic and Economic Dialogue meeting in Washington.
• Memphis Braces for Mississippi River Flood Crest. More residents were warned on Monday to get out of the way of the raging Mississippi River as it surged toward a near-record crest in its southern reaches, prompting authorities in Louisiana to divert some of the flood waters. "This is the time to gather all important items and be ready to leave your property," Shelby County Mayor Mark Luttrell said, noting the river should crest later on Monday just inches short of a 1937 record.
• CME Group(CME) to Buy Back $750 Million of Shares.
  

International Business Times:

• Christian-Muslim Clashes in Egypt Upset Gains of Revolution. The clashes between Muslims and Christians in Egypt over the weekend left 12 people killed, 180 wounded and one al-Azraa church burnt, giving a new dimension to the post-revolutionary democracy. Egypt's justice minister, Abdel Aziz al-Gindi warned that those who threaten the country's security will face "an iron fist" while the ruling Supreme Council of the Armed Forces said, it is taking stringent “deterrent” measures to stop further violence. The radical movement of Muslims in Cairo known as Salafis has been blamed for the recent attacks on Christians and others whom they disapprove. The current ruling front has miserably failed to halt Salafis' hostility towards the Christians, say opponents.

TimesUnion:

• Portugal Opens Inquiry Into Rating Agencies. Portuguese authorities have opened a criminal inquiry into three international credit rating agencies following a complaint, the Attorney General's office said Monday. The inquiry is based on a complaint filed last month by four Portuguese academics, an official with the Attorney General's office said on condition of anonymity, in keeping with departmental regulations. The four economists claimed the agencies — Moody's, Standard & Poor's and Fitch — caused severe financial losses for Portugal and demanded to know whether they profited from the ratings.

Die Welt:

• Chancellor Angela Merkel's government wants Greece to negotiate an extension of maturities on its bonds before receiving a new European Union aid package, citing officials who participated in a May 6 meeting in Luxembourg. Germany is alone in favoring a debt restructuring for Greece, which would have to be voluntary and conducted in a way that limits writedowns at euro-region banks, citing German officials. The Greek government isn't doing enough to enforce the spending cuts and privatizations it accepted in exchange for help from its euro-region peers, citing members of Merkel's coalition.

Bild:

• Greece should be allowed to leave the euro area because that would cut losses for European taxpayers, Bild, Germany's most-read newspaper, said in an editorial. Letting holders of Greek sovereign debt, including German banks, take losses as a prelude to Greece leaving the euro is preferable to keeping the highly indebted country in the currency area and providing "endless costly rescue packages," columnist Hugo Mueller-Vogg said.

La Tribune:

• Jean-Pierre Jouyet, head of France's autorite des Marches Financiers, said in an interview that the activities of banks in commodities markets need to be regulated. He said that he expects commodity trading regulation to be agreed upon at the G20 summit in November.