Today's Headlines

Bloomberg:

• IMF's Strauss-Kahn Ordered Held Without Bail. International Monetary Fund chief Dominique Strauss-Kahn, accused of attempting to rape a hotel maid, was ordered held without bail by a New York judge.
  
• Manufacturing in New York Slows More Than Estimated on Raw-Material Costs. Manufacturing in the New York region expanded at a slower pace than forecast in May, showing that surging raw-material costs are hurting confidence. The Federal Reserve Bank of New York’s general economic index fell to 11.9 from a one-year high of 21.7 in April, the central bank reported today.
• Homebuilder Confidence Fell This Month on Sales Outlook, NAHB Index Shows. Confidence among U.S. homebuilders fell in April, led by a decline in the outlook for sales, a sign the residential construction market may languish near record-low levels. The National Association of Home Builders/Wells Fargo sentiment index declined to 16 this month from 17 in March, data from the Washington-based group showed today. A measure of sales expectations for the next six months dropped to the lowest level since October, and a gauge of current purchases also fell.
• Global Demand for U.S. Assets Fell in March. Global demand for U.S. long-term financial assets such as government bonds slowed in March as investors shifted into shorter-term securities and China trimmed its portfolio of Treasuries. Net buying of long-term equities, notes and bonds totaled $24 billion during the month, compared with net buying of $27.2 billion in February, according to statistics issued today in Washington.
• Tepco Says Fuel in 2 Reactors May Have Melted. Tokyo Electric Power Co. said fuel in other reactors at its damaged nuclear plant may have melted, after confirming rods in the No. 1 unit had fallen from their assembly, potentially delaying plans to resolve the crisis. “The findings at the No. 1 reactor indicate the likelihood that the water level readings in the other reactors aren’t accurate,” Junichi Matsumoto, a general manager at the utility known as Tepco, said today. “It could be that a meltdown similar to that in the No. 1 reactor has occurred.”Moody’s Japan K.K. cut Tepco’s credit ratings and put it on review for further possible downgrade after today’s news. Tepco has been struggling to cool reactors and stop radiation leaks to end the worst nuclear crisis since Chernobyl in 1986. The discovery that fuels rods melted within 16 hours of power being knocked out means it’s unlikely Tepco can meet its timetable for containing the leaks, a nuclear engineering professor said. “Tepco didn’t clearly indicate how much uncertainty and potential negative scenarios were factored into the road map,” said Hironobu Unesaki at Kyoto University. “I don’t think they gathered enough data before coming up with the plan.” Tepco fell 7.3 percent today to 420 yen in Tokyo.
• Pimco Sees Financial Repression in U.S. Amid 'Deteriorating Debt Dynamics'. Pacific Investment Management Co., which runs the world’s largest bond fund, said “deteriorating debt dynamics” will stoke faster inflation and financial repression in the U.S. as well as at least one sovereign-debt restructuring in Europe. “It is a world where several governments in advanced economies, and the U.S. in particular, opt for financial repression and mild inflation as the major way to accommodate their deteriorating debt dynamics,” Newport Beach, California- based El-Erian wrote in a report published today on the firm’s website. “It is a world that heals slowly and unevenly and remains structurally impaired.” Such tactics are evidence officials will continue to “hobble” through in their efforts to propel economies from the aftershocks of the global recession, he said. Europe will remain plagued by its fiscal crisis with “the virtual certainty of at least one, and probably more, sovereign-debt restructurings.”
• Oil Drops on Economy Risk; BofA's Blanch Sees Demand Destruction. Oil dropped for the first day in three in New York after President Barack Obama said failure to raise the U.S. debt ceiling may unravel global finances and threaten growth in the world’s biggest crude consumer. Futures slipped as much as 1.3 percent after Obama said the U.S. “could have a worse recession than we’ve already had,” according to a segment taped for CBS’s “Face the Nation” program. Prices also slid on concern Greece’s debt crisis may worsen, threatening Europe’s economic growth. Oil may drop in the second half of the year amid signs prices are causing demand to slow, said Francisco Blanch, head of Global Commodity Research, Bank of America Merrill Lynch. Crude for June delivery slid as much as $1.30 to $98.35 a barrel in electronic trading on the New York Mercantile Exchange and was at $98.79 at 1:06 p.m. Sydney time.

Wall Street Journal:

• DOJ Threatened to Sue Over Nasdaq(NDAQ) - NYSE(NYX). Mystery solved. Nasdaq this morning dropped its noisy effort to take over the New York Stock Exchange. It slunk away saying it “became clear” regulators wouldn’t approve a merger of the U.S.’s dominant stock exchanges. Now, the U.S. Department of Justice is taking credit for squashing the Nasdaq deal. the DOJ said Nasdaq and its partner walked away from their $11 billion bid for NYSE “after the Department of Justice informed the companies that it would file an antitrust lawsuit to block the deal.”
• Why The Jobs Market Feels So Dismal by Edward Lazear. The number of hires is the same today as it was when we were shedding jobs at record rates.
• U.S. Condemns Syrian Involvement in Israel. The White House on Monday condemned Syria's involvement in protests along Israel's border over the weekend that led to the death of at least 13 people and urged the countries to show restraint. "We are also strongly opposed to the Syrian government's involvement in inciting yesterday's protests in the Golan Heights," White House Press Secretary Jay Carney said Monday. "Such behavior is unacceptable and does not serve as a distraction from the Syrian government's ongoing repression of demonstrators in its own country."
  

MarketWatch:

• Lowe's(LOW) Cuts Forecast as Sales Drop Unexpectedly.

CNBC.com:

• Medicare, Entitlements on the Table for Cuts: Pelosi. Everything must be on the table as the U.S. Congress works to cut the deficit, including Medicare, Social Security and entitlements, House Minority Leader Nancy Pelosi told CNBC Monday. "All the money is fungible, and at the end of the day the deficit has to be reduced," the California Democrat said the day the $14.3 trillion debt ceiling expired. The government has 11 weeks to raise the debt ceiling or be in default.
• High Commodity Prices to Lower 2011 Growth: Survey. High commodity prices will slow U.S. economic growth and raise inflation this year. The National Association for Business Economics' latest survey showed economists trimmed their 2011 annual average growth estimate to 2.8 percent from 3.3 percent in February. Economists lowered their growth estimates in response to the first-quarter's 1.8 percent annual pace, which was a sharp slowdown from the 3.1 percent rate in the final three months of 2010. Growth was held back by high food and gasoline prices. "Panelists are increasingly concerned about rising commodity prices and inflation," said NABE president Richard Wobbekind. The survey was conducted between April 13 and May 1, and covered 41 economists.
• IMF Chief's Arrest Could Mean Harsher Bailout for Greece.
  

Business Insider:

• The "Facebook of China", the "YouTube of China", and the "Amazon of China" Continue to Get Crushed.

Zero Hedge:

• Treasury Confirms Debt Ceiling To Be Breached Today; Will Tap Pension Funds.
• SocGen On a Chinese Slowdown: Buy China CDS, Sell Hard Commodities. That said, the risks to the global economy, should China implode, are far vaster, and we fail to conceive how the central planning cartel would ever allow this to happen, or the PBoC for that matter, considering today's earlier news of not one but two failed Chinese auctions. From SocGen:
• Full Complaint Against Dominique Strauss-Kahn Released:
• Here It Comes: Shi'ite Iran Sends "Solidarity" Flotilla To Sunni-Controlled Bahrain.
• 2 Chinese Bond Auctions Failed.
  

Internet Retailer:

• Texas Moves Ahead With An Online Sales Tax Bill. The Texas Senate approved by a 30-to-1 vote Friday a bill that would require online and catalog retailers with an in-state physical presence, such as stores or distribution centers, to collect and remit sales tax even if those facilities are operated by subsidiaries. Already approved by the Texas House of Representatives, the bill is expected to go before the governor by the end of this month.

MobileBeat:

• Seagate(STX) Debuts Mobile Wireless Storage for iPhones. Storage giant Seagate is announcing today the first mobile wireless storage device for iOS devices (iPhones, iPads, and iPod Touches). The GoFlex mobile wireless storage device is a battery-powered external hard drive that can wirelessly extend the storage capacity of any Wi-Fi-enabled device. The device can store 500 gigabytes of data and extend a device’s storage via 802.11 b/g/n wireless networking. It has enough storage capacity to back up the entire library of video, music, pictures and documents that most people have on their mobile devices.

Politico:

• Donald Trump Says He Won't Run in 2012. Donald Trump to Donald Trump: “You’re fired.” The publicity-loving New York developer and reality-TV star pulled the plug on his would-be 2012 presidential run Monday afternoon, saying he still believes he'd be best for the job but that he's not ready to give up on making money in the private sector.

Reuters:

• Angela Merkel, IMF Talks Cancelled After Dominique Strauss-Kahn Arrest. Talks between German Chancellor Angela Merkel and arrested IMF chief Dominique Strauss-Kahn, set for Sunday, have been cancelled as the International Monetary Fund will not send a replacement to Berlin, a government source said.

ECO:

• Niall Ferguson, a professor of history at Harvard University in the U.S., said Lehman Brothers Holdings Inc. seems like a "well-run bank" compared with the debt on some German lenders' balance sheets, citing an interview. A restructuring of Greek debt is "unavoidable," Ferguson said. The future of the eurozone largely depends on Germany, he said.

ABC News:

• Japan Extends the Exclusion Zone Around Fukushima. Japan has begun evacuating people from outside the official exclusion zone around the crippled Fukushima nuclear plant. With radiation levels remaining high, small children and pregnant women were the first to be moved with thousands more to be shifted into shelters and temporary housing. As the evacuation zone widened more details have emerged about the meltdown in Fukushima's reactor number one, with revelations the fuel rods probably melted in the hours after the magnitude nine earthquake in March - a fact not discovered until last week.